Transfer Pricing (with Excess Capacity)

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This video discusses transfer pricing when the selling division has excess capacity.

When the selling division has excess capacity, this means it can produce more units than customers outside the firm would be willing to purchase. In such a case, the selling division should be willing to accept any transfer price that is at least as high as its variable cost of producing the excess capacity (the extra units that can't be sold to outside customers).—
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I just learned a whole chapter in 10 mins from your videos. Thank you for all your effort in making these videos, God bless!

Anonymouss
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thank you very much! love your video and it helps a lot for my exam!

seleannia
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AS ALWAYS, THE VIDEO CLEAR AND UNDERSTOOD

damounkaoutar
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i dont undersrand why fixed costs are ignored still

madarah