An organization is comprised of two divisions. One of the divisions manufactures a product that it sells both to an imperfect external market and to the other division.
The organization wishes to establish the most suitable basis for the transfer price for this product and is considering either a negotiated transfer price or a market-based transfer price.
Which of the following statements is correct?
SkillWeave Industries are focused on managing the risk of selling their cars to the region due to economic turmoil, and have now begun using funds from sales in the region to fund supplier purchases from that region to
reduce the risk from the volatile currency. However, SkillWeave want to go a step further and make the risk even less sizeable.
Which of the following is a method by which SkillWeave can operate in the market and transfer the risk of exchange rate exposure to another party?
An organization produces only two products. Each month it produces 1,000 units of product A and 10,000 units of product B.
Using traditional absorption costing the products have very similar unit costs. However when costs are calculated using activity-based costing (ABC), product A's unit cost is significantly higher than that of product B.
Which of the following factors has the potential to cause this difference?
Select ALL that apply.
Which THREE of the following conditions are required for a sustained learning curve to apply?
A company is comprised of two divisions, each of which manufactures a single product. Division A manufactures a product which can be sold in a perfect external market or transferred as an intermediate product to division B. Division B finishes the intermediate product and sells this in a perfect external market.
Due to company policy, internal transfers are recorded at the external market price. At this transfer price both divisions make a profit from their activities.
Which of the following will NOT be achieved by the company's transfer pricing policy?
