"'"' .a- "'J 'r' r'" r" " _'_" l J- a 1'3 ' "' ' '" ' " r' '
strong slnce the acgulsrtlon. wlth the market prlce jumplng to $4. 05 per pound. Mctory can buy or sell Hydrol at 1hls prloe. Th
company recendy recelved a speclal- -order Ingulry. one that wo
Algeria Transport Company has average invested capital of $800,000 and a target return on
investment of 15%. The total cost per unit is $20 based on a volume level of 25,000 units. Albany's
markup percentage on total cost is:
Gridiron Merchandising anticipated selling 271,000 units of a major product and paving sales commissionst
unit. Actual sales and sales commissions totaled 271,500 units and 5501.400, respectively. tithe companyr us
exible budget for per
A general calculation method for transfer prices that achieves goal congruence begins with the
additional outlay cost per unit incurred because goods are transformed and then
adds the opportunity cost per unit to the organization because of the transfer.
Consider the following statements about pricing:
I. Prices are often determined by the market, subject to the constraint that costs must be covered in
the long run.
II. Prices are often based on costs, subject to the constraint that customers and competit
Green Auto's Northern Division is currently purchasing a part from an outside supplier. The
company's Southern Division, which has no excess capacity, makes and sells this part for external
customers at a variable cost of $19 and a selling price of $31. I
McKenna's Florida Division is currently purchasing a part from an outside supplier. The company's
Alabama Division, which has excess capacity, makes and sells this part for external customers at a
variable cost of $22 and a selling price of $34. If Alabam
Which of the following transfer-pricing methods can lead to dysfunctional decision-making behavior
External market price.
A professionally negotiated, amicable settlement between the buying and selling divisions.
Franco Electronics currently sells a camera for $240. An aggressive competitor has announced
plans for a similar product that will be sold for $205. Franco's marketing department believes that if
the price is dropped to meet competition, unit sales will i
Manhattan Phann aceu'tlcals. Inc.r speclallzes In packaglng bulk drugs In standard dosages for local hospitals.
Wyant Me morlal Hospltal has asked Manhattan Pharmaceutlcals to bid on the packaglng of one mllllon doses
of medlcatlon at total cost plus a re
Nevada, Inc. has two divisions, one located in Las Vegas and the other located in Reno. Las Vegas
sells selected goods to Reno for use in various end-products. Assume that the transfer between the
two divisions takes place regardless of the transfer price
The four tasks that follow take place with the concept known as target costing:
2Establish a target selling price.
3Establish a target cost.
4Establish a target profit.
Which of the following choices depicts the correct sequence of the
The following information was taken from the segmented income statement of Restin, Inc, and the company's three divisions:
Lo 5 Bay Central
Restin, Angeles Area Valley
m Division Division Division
Revenues $750,000 $200,000 $23 5,000 $325,000