Reference no: EM13490407

Relevant Costs and Transfer Pricing

AB Company specialises in electronic products. Division A makes integrated circuits and sells 90% of its output to outside companies. This division is operating well below capacity.

B部门开发了一个新产品代号为XK120，该产品可以使用A部门A制造的电路。A部门的经理引用了每电路80美元的转让价格，该价格低于当前的市场价格，并且将提供40美元的捐款保证金。
The accountant of Division B has provided the following estimates of costs for XK120:

* $40 fixed, $40 variable, **$10 fixed, *10 variable

B部门的营销经理提交了以下对XK120需求时间表的估计：

Division A has enough capacity to meet the 12 000 maximum volume that Division B could obtain.

Divisional managers are evaluated on ROI, and total investment would be the same for any of thevolumes that Division B may sell.

(a) As the manager of Division B, given the transfer price of $80, what price would you charge for XK120 and what volume would you sell?

(b) Given the price calculated in (a), what total contribution would be earned by:

(i) Division A?
(ii) Division B?

(d) From the point of view of the managing director of AB Company, what price should Division B charge for XK120, and what volume should be sold in order to maximise return on investment for the company as a whole?

(e) If the volume calculated in (c) were to be met, what is the minimum transfer price that could be accepted by Division A so that its total contribution would be no less than that calculated in (b)(i)?

(f) If the volume calculated in (c) were to be met, what is the maximum transfer price that could be paid by Division B so that its total contribution would be no less than that calculated in (b)(ii)? (4marks)

（g）如果董事总经理确定B部门应出售该卷，从而为整个公司带来最佳结果，则可以向A部门A部门经理提供什么理由，要求他接受转让价格等于等于在（e）中计算的？