Thank you for amazing lecture , I have a question about savings in internal sales, for example if selling cost is avoided by internals sales does it affect minimum price or maximum price?
Sir for the Kaplan books there is a question stating that getting any price above the variable cost is not a must to be accepted as the fixed cost might not be covered but in the lecture you stated that we should assume that the fixed cost has no effect and should not be taken into consideration
No, what I say is that unless told otherwise we assume that the supplying division is making other products in addition to the one we are concerned with. In that case the fixed costs of that division are irrelevant to the calculation of the transfer price because they will be incurred whatever happens. What I explain in my lectures is more than enough to be able to deal with all past real exam questions :-)
Why the lost contribution is not $1 for an hour, because we will be earning $3 per hour if we are producing Y, $4 if X. So by spending an hour for Y, are not we losing $1?
By spending an hour on Y we are losing the $4 we could have been earning from X. So we have to charge enough to ensure that we earn at least $4 per hour.
Thank you Sir….I’m using these lectures for the Dec 2023 sitting and will definitely come back with an update😊.
God bless you professor, you have made transfer pricing very easy for me.
Your lectures sir are amazing!! You have literally saved my degree!
AaS@asana aaas$saaaaaaaaaaAaaaqaasaaaaaaasaaa SaaS$aassssa@asaasaasaaaa sa aaaa
Thanks a lot! This channel is actually making a great contribution!
Thank you for your comment. Please do visit our free website to see the other resources that we have available (and everything is free of charge :-) )
Brilliant professor
Thank you for your comment :-)
Thanks a lot for the lecture. Very helpful
Thank you for amazing lecture ,
I have a question about savings in internal sales, for example if selling cost is avoided by internals sales does it affect minimum price or maximum price?
Sir for the Kaplan books there is a question stating that getting any price above the variable cost is not a must to be accepted as the fixed cost might not be covered but in the lecture you stated that we should assume that the fixed cost has no effect and should not be taken into consideration
No, what I say is that unless told otherwise we assume that the supplying division is making other products in addition to the one we are concerned with. In that case the fixed costs of that division are irrelevant to the calculation of the transfer price because they will be incurred whatever happens. What I explain in my lectures is more than enough to be able to deal with all past real exam questions :-)
Thank you so much , just making sure that all those lectures are enough as study materials in addition to Kaplan exam kit for CBE right ?
lol
Which Text Book are you referring to sir?
As it says at the start of the video, it is the free lecture notes that you can download from our website.
Why the lost contribution is not $1 for an hour, because we will be earning $3 per hour if we are producing Y, $4 if X. So by spending an hour for Y, are not we losing $1?
By spending an hour on Y we are losing the $4 we could have been earning from X. So we have to charge enough to ensure that we earn at least $4 per hour.
@3:19 he still messed it up😂