Creative Division

3 (a) The Creative Division (CD) of Unique Components Ltd produces wooden subdivisions that it both(prenominal) sells to away customers and canalises to other divisions deep down its own group of companies. The output involves the homework of timber, cutting the timber into shapes and the assembly of the shapes into components. The add up component follow for component A has been estimated as $41.21 per whole. Selling charges to external customers devote been organise by adding a mark-up of 35% to total estimated component cost. mandatory: Discuss the application and acceptability of apiece of the following transfer price bases at which component A may be offered by CD to other divisions within the same group of companies: (i) outside selling price and set selling price; (ii) b dictateline cost marginal cost plus an annual jut sum; and (iii) Dual pricing. Your dish out should incorporate illustrative set ($) for each transfer price using data provided a bove and additional data of your choice. (10 marks) (b) A redesign of component A is creation considered that is likely to case in changes in the meter of timber and sum up of cuts, in the pick up process that go forth be required. A data-table abstract has been prepared to monitor the effect on building block cost for component A of a ordinate of determine for such changes.

In addition, a set of subjective probabilities hold up been assigned to the likelihood of (i) the timber required and (ii) the number of cuts required, existence at the levels shown in the data-table analysis. A matrix has been constructed showing the feature chance f! or each possible combination of changes of timber and number of cuts. The data-table analysis and combined probability matrix are as follows: Data-table of values of total component cost for component A per unit ($) for a range of values of number of cuts in shaping and timber required (square metres) Timber (square metres) Number of cuts 25 30 35 40 50 0.8 47.15 47.69 48.15 48.55 49.21 0.7...If you want to piddle a full essay, order it on our website: OrderCustomPaper.com

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