The Knuckles and Brackets Division transfers a component product to the Assembly Division. Both divisions are part of Automakers Inc. and are organized as profit centers. Automakers has a general policy of using a 10 per cent markup for cost-based transfer prices. Knuckles and Brackets also can sell the component product in the open market to other automobile companies for $75. The cost to make the component is $55. By transferring the component internally, the Knuckles and Brackets Division saves $5 in sales expenses and transportation costs. The manager of the Knuckles and Brackets Division wants the transfer price to be $75 and the manager of the Assembly Division wants the transfer price to be $70. Which of the following are not true (select all appropriate answers):
a. If the transfer price is $75, then the divisions are using a market-based transfer price.
b. If the transfer price is $40, then the divisions are using a cost-based transfer price.
c. If the transfer price is $70, then the divisions are using a negotiated transfer price.
d. If the transfer price is $70, then both divisions are sharing the profits. e. If the transfer price is $55, then the Knuckles and Brackets Division is keeping all the profits.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more