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UkoKoshka [18]
3 years ago
6

Division A manufactures an aircraft engine component with unit variable product cost of $38 and market price of $50. Division A

incurs shipping costs of $3 per unit for sales to outside parties only. Division B uses this component in the manufacture of its own engine production activities. Top management allows negotiated transfer pricing. If Division A is operating at full capacity, the maximum transfer price (the ceiling of the bargaining range) is: a. $38. b. $50. c. $44. d. $47. e. There is no bargaining range.
Business
1 answer:
olya-2409 [2.1K]3 years ago
7 0

Answer:

The maximum transfer price would be $50.

Explanation:

The maximum transfer price is nothing but the market price for the product , which is the most simple way to derive a transfer price . Here by selling the components of aircraft engines at market price, there are very good chances of high profits to be earned. So the maximum transfer price should be $50.

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Robert wants to hire more employees for his doggie day-care business. Which of
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A description of how a particular society distributes its resources to produce goods and services is the definition
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Suppose Balin has $100 to invest in an opportunity that returns, for every $100 invested, $120 if it goes well but only $80 if i
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D) 200 percent profit; 100 percent loss.

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There is a 50% chance that the company will make profit (20% profit) and 50% chance that it will lose money (20% loss).

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A multinational enterprise (MNE) is defined as a firm that: exports more than it imports. sells in many markets around the globe
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A multinational enterprise (MNE) is defined as a firm that operates and controls production or distribution facilities in more than one country.

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According to Franklin Root MNE is a company that,

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