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Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 26ISBN: 978-1285743615Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 26ISBN: 978-1285743615 Exercise 20
Decision on transfer pricing
Based on XPort Industries' data in Exercise 24-20, assume that a transfer price of $190 has been established and that 60,000 units of materials are transferred, with no reduction in the Components Division's current sales.
a. How much would XPort Industries' total income from operations increase
b. How much would the Instrument Division's income from operations increase
c. How much would the Components Division's income from operations increase
d. If the negotiated price approach is used, what would be the range of acceptable transfer prices and why
Based on XPort Industries' data in Exercise 24-20, assume that a transfer price of $190 has been established and that 60,000 units of materials are transferred, with no reduction in the Components Division's current sales.
a. How much would XPort Industries' total income from operations increase
b. How much would the Instrument Division's income from operations increase
c. How much would the Components Division's income from operations increase
d. If the negotiated price approach is used, what would be the range of acceptable transfer prices and why
Explanation
Verified
Verified
(a)
Calculate X Industries ' total inco...
Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
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