MGT 5 Lecture 13: Nov 15 2018 -- Transfer Pricing and Capped Budgets
20 Nov 2018
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Document Summary
Tp no excess = vc + cm = sp/ Div a has 3700 in excess capacity, the last 1100 is not excess (3700)(12) = 44,400 (1100)(17) = 18,700. Things we will go over: cost data, cup (comparable uncontrolled price, budgets, capital budgets. 8% collected in the second month after (2% never collected) Estimate march collections (110,000)(. 3) = 33,000 march cash sales (110,000 *. 7)(. 15) = 11,550 march credit sales (92,000*. 7)(. 75) = 48,300 february credit sales collected in march (100,000*. 7)(. 08) = 5,600 january credit sales collected in march. You get the money in the next 30 days (or more) A certain percentage of credit sales are never collected (people don"t always pay off their credit cards) To considerably increase sales (it"s a trade off) Volume variance of 1500 favorable; price variance of 2,050 unfavorable. Reasons why you could"ve been below goal. The reasons why you were below goal don"t both have to be negative, only one has to be.
