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Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787 Exercise 45
TRANSFER PRICING AND SECTION 482
Comfort Furniture Manufacturing, Inc., has a division in the United States that produces and sells furniture for discount furniture stores. One type of sofa is made in the International Division in China. The sofas are sold externally in the United States for $250 each. It costs $7.50 per sofa for shipping and $10 per sofa for import duties. When the sofas are sold externally, Comfort Furniture Manufacturing spends $25 each for commissions and an average of $1.30 per sofa for advertising.
Required:
1. Which Section 482 method should be used to calculate the allowable transfer price?
2. Using the appropriate Section 482 method, calculate the transfer price.
Comfort Furniture Manufacturing, Inc., has a division in the United States that produces and sells furniture for discount furniture stores. One type of sofa is made in the International Division in China. The sofas are sold externally in the United States for $250 each. It costs $7.50 per sofa for shipping and $10 per sofa for import duties. When the sofas are sold externally, Comfort Furniture Manufacturing spends $25 each for commissions and an average of $1.30 per sofa for advertising.
Required:
1. Which Section 482 method should be used to calculate the allowable transfer price?
2. Using the appropriate Section 482 method, calculate the transfer price.
Explanation
Verified
Verified
1.
The comparable uncontrolled price me...
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
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