问题详情

HammerisalargegardenequipmentsupplierwithretailstoresthroughoutToolland.ManyoftheproductsitsellsareboughtinfromoutsidesuppliersbutsomearecurrentlymanufacturedbyHammer’sownmanufacturingdivision‘Nail’.
Theprices(atransferprice)thatNailchargestotheretailstoresaresetbyheadofficeandhavebeenthesubjectofsomediscussion.ThecurrentpolicyisforNailtocalculatethetotalvariablecostofproductionanddeliveryandadd30%forprofit.Nailarguesthatallcostsshouldbetakenintoconsideration,offeringtoreducethemark-uponcoststo10%inthiscase.Theretailstoresareunhappywiththecurrentpricingpolicyarguingthatitresultsinpricesthatareoftenhigherthancomparableproductsavailableonthemarket.
Nailhasprovidedthefollowinginformationtoenableapricecomparisontobemadeofthetwopossiblepricingpoliciesforoneofitsproducts.
Gardenshears
Steel:theshearshave0？4kgofhighqualitysteelinthefinalproduct.Themanufacturingprocessloses5%ofallsteelputin.Steelcosts$4,000pertonne(1tonne=1,000kg)
Othermaterials:Othermaterialsareboughtinandhavealistpriceof$3perkgalthoughHammersecuresa10%volumediscountonallpurchases.Theshearsrequire0？1kgofthesematerials.
Thelabourtimetoproduceshearsis0？25hoursperunitandlabourcosts$10perhour.
Variableoverheadsareabsorbedattherateof150%oflabourratesandfixedoverheadsare80%ofthevariableoverheads.
DeliveryismadebyanoutsourceddistributorthatchargesNail$0？50pergardenshearfordelivery.
Required:
(a)CalculatethepricethatNailwouldchargeforthegardenshearsundertheexistingpolicyofvariablecostplus30%.(6marks)
(b)Calculatetheincreaseordecreaseinpriceifthepricingpolicyswitchedtototalcostplus10%.(4marks)
(c)Discusswhetherornotincludingfixedcostsinatransferpriceisasensiblepolicy.(4marks)
(d)DiscusswhethertheretailstoresshouldbeallowedtobuyinfromoutsidesuppliersifthepricesarecheaperthanthosechargedbyNail.(6marks)
请帮忙给出正确答案和分析，谢谢！