matrix limited, has two subsidiaries in USA and England. the subsidiary in USA produces specialist components...
matrix limited, has two subsidiaries in USA and England. the subsidiary in USA produces specialist components and transfers the to England were there where assembled and packed and sold to the outside customers.
1. the production and sales volume may each be assumed to be 400,000 units per yeas no matter where assembly and sales take place.
2.Manufacturing costs in USA are $16 per unit and fixed costs (for normal range of production) $1.8million
3. additional assembly cost in England are $9 per unit and fixed costs $700,000/-.
4. the unit sales price in England is $70 to external customers.
assuming a transfer price between the divisions of $50 per unit, calculate:
(i) the total profit per year made by the company overall
(ii) the profit per year made by each division
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matrix limited, has two subsidiaries in USA and England. the
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