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ddd [48]
3 years ago
15

The Eastern Division sells goods internally to the Western Division at Tennessee Company. The quoted external price in industry

publications from a supplier near Eastern is $200 per ton plus transportation. It costs $20 per ton to transport the goods to Western. Eastern's actual market cost per ton to buy the direct materials to make the transferred product is $100. Actual per-ton direct labor is $50. Other actual costs of storage and handling are $40. Tennessee Company's president selects a $220 transfer price. This is an example of: (CIA adapted)
Business
1 answer:
Gennadij [26K]3 years ago
7 0

Answer: Market based transfer pricing

Explanation:

A transfer price is the price which is charged by one division of an organization for the product or service which is supplied to another division of the same organization.

The three main criteria which must be satisfied by transfer pricing system in the decentralized company are:

(1) provision of information that allows central management to assess the divisions based on their contribution to total profit of the company

(2) stimulate every manager’s efficiency without the loss of the division’s autonomy.

(3) motivation of the divisional managers in order to accomplish their own profit goal in a way that contributes to the success of the company.

This is market based transfer pricing because the $220 transfer price that is selected is based on quoted external price.

You might be interested in
A formal statement of values and ethical standards is known as
s2008m [1.1K]

Answer:

Code of ethics

Explanation:

Code of ethics is described as the set of the principles which are followed or conduct within the business or organization, it helps in guiding the behavior as well as help in decision making.

The motive of the code id to provide the members and the other parties who are interested with the guidelines form taking an ethical choices while conducting or performing the work.

In short, it is a written as well as formal statement of the ethical standards as well as values, which the guide the actions of the firm.

5 0
3 years ago
On January​ 2, 2019, Kaiman Corporation acquired equipment for​ $700,000. The estimated life of the equipment is 5 years or​ 80,
disa [49]

Answer:

$272,000

Explanation:

Accumulated depreciation is the sum of depreciation expense.

Depreciation is a method of expensing the cost of an asset.

Depreciation expense using the straight line depreciation method = (Cost of asset - Salvage value) / useful life

($700,000 - $20,000) / 5 = $136,000

The straight line depreciation method Deprecation allocates the same deprecation expense each year of the useful life of an asset.

The depreciation expense in 2019 and 2020 would be $136,000 x 2 = $272,000

I hope my answer helps you

8 0
2 years ago
If a person attempts to read their email while they are riding the bus they are
8_murik_8 [283]

Reading there email on a bus?

6 0
3 years ago
Read 2 more answers
Suppose that Xtel currently is selling at $66 per share. You buy 500 shares using $20,000 of your own money, borrowing the remai
hram777 [196]

Answer:

The percentage loss will be "-9.08%". The further explanation is given below.

Explanation:

The given values are:

Invested amount

= 20,000

Price of purchase

= $66

Total number of shares

= 500

The borrowed amount will be:

= (500\times 66)-20000

= 13,000

When the price increase to 69.63, the gain will be:

= 69.63-66

= 3.63 ($)

The total gain will be:

= 3.63\times 500

= 1815

Increase in percentage will be:

= \frac{1815}{20,000}\times 100

= 9.08%

Whereas if price stays quite well at $66, there is really no increase, so the percentage growth would be 0%.  

If the price declines toward a loss of 62,37 per share:

= 62.37-66

= -3.63

Now,

The total loss will be:

= -3.63\times 500

= -1815

The percentage loss will be:

= \frac{-1815}{15,000}

= -9.08 (%)

8 0
3 years ago
Gulshan Parvana operates a machine shop in Istanbul, Turkey. She places bids on small projects in the metropolitan area. Which o
vitfil [10]

Answer:

A) number of projects completed

Explanation:

As Gulshan Parvana is operating a machine shop which generate revenue based on the bids on small projects. So, the most suitable basis for the allocation of utility cost is number of projects completed in the month. This basis drives the utility cost. As revenue and cost are based on the number of bids on projects won and completed in the period is the most suitable basis for cost assignment.

7 0
3 years ago
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