Barrister Company has two divisions: A and Z. The A Division produces a single product that can be sold to outside customers or to the Z Division. Sales forecasts, production statistics and costs for both divisions for 2014 are shown below:
A Division:
Z Division:
* When A Division sells to Z Division, no variable selling costs are incurred by A Division.
Calculate the minimum per unit transfer price that A Division should charge Z Division in 2014, using the general transfer-pricing formula.
A) $6.00
B) $8.50
C) $7.26
D) None of the given answers

Question

Barrister Company has two divisions: A and Z. The A Division produces a single product that can be sold to outside customers or to the Z Division. Sales forecasts, production statistics and costs for both divisions for 2014 are shown below:
A Division: 
Z Division: 
* When A Division sells to Z Division, no variable selling costs are incurred by A Division.
Calculate the minimum per unit transfer price that A Division should charge Z Division in 2014, using the general transfer-pricing formula.
A) $6.00 
B) $8.50 
C) $7.26 
D) None of the given answers

Quizplus · Accepted Answer

The Answer of Barrister Company has two divisions: A and Z. The A Division produces a single product that can be sold to outside customers or to the Z Division. Sales forecasts, production statistics and costs for both divisions for 2014 are shown below:
A Division: 
Z Division: 
* When A Division sells to Z Division, no variable selling costs are incurred by A Division.
Calculate the minimum per unit transfer price that A Division should charge Z Division in 2014, using the general transfer-pricing formula.
A) $6.00 
B) $8.50 
C) $7.26 
D) None of the given answers

Barrister Company Has Two Divisions: a and Z