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I have another question and again i havent understood the notes ive been given, it's quite heavy reading to be honest! could any one shed some light on this question please?<BR><BR>Division A make product x @ a cost of £5; it can then sell it to external customers (with unlimited demand) at £12 including post and packaging of £2.50, or it can transfer it to division B.At what price should the transfer be made to promote optimum decisions for the company as a whole?<BR><BR>Thanks.
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Reports and returns again!
You have 4 ways where you transfer from company a to b<BR><BR>1. Actual Cost (full or marginal cost), where there is no profit retained within company a<BR><BR>2. standard cost, which will contain cost variances and encourage cost control<BR><BR>3. cost plus - transfer of cost to cover costs, contribution/profit <BR><BR>4. market price<BR><BR>What this question is asking is at what value would company a benefit from financially? answer £12.00 plus £2.50= £14.50. at cost plus, this would cover the costs, contribution and postage costs.0 -
Reports and returns again!
Thanks alot for that, i looke at that in my note but i wasnt sure it was right!<BR>0