Creative Division

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

In addition, a set of subjective probabilities lease been assigned to the likelihood of (i) the timber required and (ii) the number of cuts required, creation at the levels shown in the data-table analysis. A matrix has been constructed showing the unite chance for 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 transmit a full essay, order it on our website: OrderCustomPaper.com

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