1. Transfer Pricing Chapter 10 Managerial Accounting Concepts and Empirical Evidence

2. Managerial Accounting Concepts and Empirical Evidence Engine United, Inc. Negotiated Transfer Price Illustration

3. Managerial Accounting Concepts and Empirical Evidence Engine United, Inc. Negotiated Transfer Price Illustration

4. Managerial Accounting Concepts and Empirical Evidence Engine United, Inc. Negotiated Transfer Price Illustration 50,000 + (10,000* $35) = 400,000 Transferred Price $ 50,000 = (10,000* $5)

5. Managerial Accounting Concepts and Empirical Evidence Engine United, Inc. Negotiated Transfer Price Illustration

6. Managerial Accounting Concepts and Empirical Evidence Engine United, Inc. Negotiated Transfer Price Illustration

7. Managerial Accounting Concepts and Empirical Evidence Engine United, Inc. Negotiated Transfer Price Illustration

8. Managerial Accounting Concepts and Empirical Evidence Engine United, Inc. Negotiated Transfer Price Illustration 350,000 Subunit Variable Cost + (10,000 * 4) Cost of external purchase $ 10,000

9. Managerial Accounting Concepts and Empirical Evidence Engine United, Inc. Negotiated Transfer Price Illustration

10. Managerial Accounting Concepts and Empirical Evidence Engine United, Inc. Negotiated Transfer Price Illustration

11. Managerial Accounting Concepts and Empirical Evidence Dehy Company Cost Based Transfer Price Illustration VC =$2* 1,000 units Rev = Sell P * units = $ 8* 1,000 = $ 8,000

12. Managerial Accounting Concepts and Empirical Evidence Dehy Company Cost Based Transfer Price Illustration VC = $4 * 1,000 units TVC = $ 4,000 + $ 3,000 = $ 7,000 Buying subunit’s own VC

13. Managerial Accounting Concepts and Empirical Evidence Dehy Company Cost Based Transfer Price Illustration Selling subunit VC ($2,000) + buying subunit VC ($4,000)

14. Managerial Accounting Concepts and Empirical Evidence Dehy Company Cost Based Transfer Price Illustration

15. Managerial Accounting Concepts and Empirical Evidence Dehy Company Cost Based Transfer Price Illustration Note: all calculations are to be done using 2,000 units