Problem 13.8. A Ltd. produces P by its two divisions, X and Y. P is first processed in X and then in Y, X and Y are treated as profit centres. The cost-volume-profit structure is as given below:...

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Problem 13.8. A Ltd. produces P by its two divisions, X and Y. P is first processed in X and then in<br>Y, X and Y are treated as profit centres. The cost-volume-profit structure is as given below:<br>Оutput<br>Profit<br>Costs<br>Rs. 900<br>1,000<br>1,120<br>units<br>1,000<br>1,100<br>1,200<br>1,300<br>1,400<br>1,500<br>1,600<br>Net revenue<br>Rs. 4.000<br>4,300<br>4,540<br>4,730<br>4,900<br>5,030<br>5,110<br>Rs. 3,100<br>3,300<br>3,420<br>3,480<br>3,500<br>3,450<br>3,310<br>1,250<br>1,400<br>1,580<br>1,800<br>Note: Net revenue for Y means the sale proceeds minus costs incurred in Y. These costs do not include<br>the price of transferred material chargeable by X.<br>Required: (a) Discuss the problemi.<br>(b) Fix and explain the optimum transfer price for A Ltd.<br>

Extracted text: Problem 13.8. A Ltd. produces P by its two divisions, X and Y. P is first processed in X and then in Y, X and Y are treated as profit centres. The cost-volume-profit structure is as given below: Оutput Profit Costs Rs. 900 1,000 1,120 units 1,000 1,100 1,200 1,300 1,400 1,500 1,600 Net revenue Rs. 4.000 4,300 4,540 4,730 4,900 5,030 5,110 Rs. 3,100 3,300 3,420 3,480 3,500 3,450 3,310 1,250 1,400 1,580 1,800 Note: Net revenue for Y means the sale proceeds minus costs incurred in Y. These costs do not include the price of transferred material chargeable by X. Required: (a) Discuss the problemi. (b) Fix and explain the optimum transfer price for A Ltd.

Jun 03, 2022

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Problem 13.8. A Ltd. produces P by its two divisions, X and Y. P is first processed in X and then in Y, X and Y are treated as profit centres. The cost-volume-profit structure is as given below:...

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