Marketing Division Assignment
Atascadero Industries operates a Manufacturing Division and a Marketing Division. Both divisions are evaluated as profit centers. Marketing buys products from Manufacturing and packages them for sale. Manufacturing sells many components of third parties in addition to Marketing. Selected data from the two operations follow: Manufacturing Marketing 508,000 4,950 1,080,000 Capacity (units) Sales price sts Elued coste 1,800 $10,800.000 $7,280,000 For Manufacturing, this is the price to third parties.
For Marketing, this does not include the transfer price paid to Manufacturing. Suppose Manufacturing is located in Country X with a tax rate f 70 percent and Marketing in Country Y with a tax rate of 30 percent. All other facts remain the same. Required: Current production levels in Manufacturing are 580,000 units. Marketing requests an additional 180,000 units to produce a special order. What transfer price would you recommend? per unit, Transfer price Suppose Manufacturing is operating at full capacity. What transfer price would you recommend? per unit, Transfer price Suppose Manufacturing is operating t 928,000 units. What transfer price would you recommend? Transfer price per unit. .