What range would the transfer price fall into if it were negotiated between the two divisions?

The Papers division of Forsythe Industries manufactures cardboard, which it transfers to the Box division, which uses the cardboard to make boxes. It costs $0.02 per square foot to make the cardboard (plus fixed costs, which are $30,000 per year for the Papers division), which sells for $0.05 per square foot on the market. The Box division uses 32 square feet to make a box, which costs an additional $0.10 per box to manufacture (plus fixed costs, which are $20,000 per year for the Box division). Boxes are sold for $2.50 each. The Papers division has the capacity to produce 2,000,000 square feet of cardboard a year, which is sufficient to fill the needs of both the Box division and the external market. The Box division sells 50,000 boxes per year. Both divisions are located in the same tax jurisdiction. Calculate the transfer price if it is based on       a. Variable cost with a 10% markup     b. Full cost with a 10% markup             c. Market price       d. Which of the prices calculated above would the company as a whole most prefer?   e. What range would the transfer price fall into if it were negotiated between the two divisions?

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Explain the relevance of SSAE 18 and what does it report on.

Using an Internet web browser, search for AICPA’s Statement on Standards for Attestation Engagements (SSAE) No. 18, and perform the following: a. Explain the relevance of SSAE 18 and what….

What is the most profitable level of output per week for the new product

ABC plc is about to launch a new product. Facilities will allow the company to produce up to 20 units per week. The marketing department has estimated that at a….

Calculate the unit selling prices which will: (a) maximise revenue; and (b) maximise profit.

B Ltd manufactures blodgets. It has been ascertained that the market for blodgets is follows:   ● at unit price £20, no blodgets are demanded or sold; ● at unit….