Question 1
Briefly explain each of the three methods used to determine a transfer price.
Question 2
DesMoines Valley Company has two divisions, Computer Services and Consultancy Services. In addition to their external customers, each division performs work for the other division. The external fees earned by each division in 20X5 were $200,000 for Computer Services and $350,000 for Consultancy Services. Computer Services worked 3,000 hours for Consultancy Services, who, in turn, worked 1,200 hours for Computer Services. The total costs of external services performed by Computer Services were $110,000 and $240,000 by Consultancy Services.
Required:
a. Determine the operating income for each division and for the company as a whole if the transfer price from Computer Services to Consultancy Services is $15 per hour and the transfer price from Consultancy Services to Computer Services is $12.50 per hour.
b. Determine the operating income for each division and for the company as a whole if the transfer price between divisions is $17 per hour.
c. What are the operating income results for each division and for the company as a whole if the two divisions net the hours worked for each other and charge $12.50 per hour for the one with the excess? Which division manager prefers this arrangement?
Impacts of glaciers on landscapes can be seen as (a) a U-shaped valley in Labrador, (b) a drumlin fi
Chesapeake Bay: A Drowned River Valley
HCPCs Modifiers Used for Medical Office Services Cont.
The two divisions of the ventromedial motor pathway: the ventromedial corticospinal tract and the ...
An organizational specialist is hired as a consultant to a company planning to open a coffee ...
DNA-Z computer model