Chen Company’s Small Motor Division manufactures a number of small motors used in household and office appliances. The Household Division of Chen then assembles and packages such items as blenders and juicers. Both divisions are free to buy and sell any of their components internally or externally. The following costs relate to small motor LN233 on a per unit basis. Fixed cost per unit $ 5
Variable cost per unit $11
Selling price per unit $35 Instructions
(a) Assuming that the Small Motor Division has excess capacity, compute the minimum acceptable price for the transfer of small motor LN233 to the Household Division.
(b) Assuming that the Small Motor Division does not have excess capacity, compute the min-imum acceptable price for the transfer of the small motor to the Household Division.
(c) Explain why the level of capacity in the Small Motor Division has an effect on the transfer price.

a. $11

b. $35

c. If the transferring division does not have excess capacity,this would mean that some units that could have been sold externally would be transferred internally and this creates an opportunity cost. Opportunity costs increase the transfer price.However no opportunity cost exist if transferring division has excess capacity and hence a lower transfer price.

Explanation:

The minimum acceptable price is the price that is acceptable to the transferring division and out of a range of acceptable prices, it is that which would be the best for the company.

When there is excess capacity.

Note : No opportunity costs would exist.

Minimum acceptable price = Variable Cost - Internal Savings + Opportunity Cost

                                            = $11

When there is excess capacity.

Note : Opportunity costs would exist.

Minimum acceptable price = Variable Cost - Internal Savings + Opportunity Cost

                                            = $11 + ($35 - $11 )

                                            = $35

Why Capacity of transferring division (Small Motor Division) has an effect on the transfer price.

If the transferring division does not have excess capacity,this would mean that some units that could have been sold externally would be transferred internally and this creates an opportunity cost. Opportunity costs increase the transfer price.However no opportunity cost exist if transferring division has excess capacity and hence a lower transfer price.

La respuesta correcta para esta pregunta abierta es la siguiente.

A pesar de que no se anexan opciones o incisos para responder, podemos decir lo siguiente.

Aquí estamos hablando de los costos históricos. Estos costos son los que se produjeron en determinado periodo: los costos de los productos vendidos o los costos de los que se encuentran en proceso.

Un buen contador dentro de la empresa, se basará en estos costos históricos para poder predecir o proyectar los costos predeterminados y tener cierta información de lo que puede suceder a corto o mediano plazo.

Recordemos que esos costos predeterminados son necesarios para que los contadores puedan elaborar presupuestos lo más apegados a la realidad y se puedan ajustar con el tiempo. Para elaborar estos costos predeterminados, el contador hace uso de herramientas estadísticas.