Ch 9: Excess Capacity

Question 1

https://d2l.ucalgary.ca/d2l/le/content/647658/viewContent/6783758/View

Answer 1

slide 16 onwards!

Question 2

Neogitated Transfer Price

Answer 2

is the same thing as partial excess capacity

Question 3

when do you use partial excess capcity?

Answer 3

when # of units transferred internally is DIFFERENT from # of units that must be foregone

Question 4

under negotiated transfer price

Answer 4

minimum tp (seller) = (vc per unit on internal transfer) + (total lost CM on external sales/ # of units transferred internally)

Question 5

For transfer pricing when you are seeing the forgone contribution margin.. it is going to be the price yo ucan get in the market - variable costs to you to transfer internally

Answer 5

this becomes the minimum transgeer price

Question 6

transfer pricing partial

numerator: (cm per unit foregone) * (# units foregone from outside)

Answer 6

denominator: how much the buyer wants