Because it's a cost for the other entity--net effect zero for the group. Think of it as if they are departments in the same company--the company only makes a profit on external sales.
Hi Steve amazing lecture , I have question about Transfer pricing If there is saving when internal transfer. Will it affect minimum price or maximum price??
Hey there, it will affect the minimum transfer price: the starting place in transfer pricing discussion is to find the minimum price, which is marginal cost + opportunity cost. Marginal cost is variable cost. The maximum transfer price would be the external market price.
Hi steve, if i prepare the profit statement on unit cost basis and then multiply the unit contribution by number of units, and then subtract fixed cost, to arrive at group profit(i understand that i would loose marks for divisional total profit - .5 each) Will the rest be considered correct? I am very very worried please reply Requesting your help.
If you did what you said and accurately calculated the group profit, you'd get marks. But you'd miss the marks for the internal sales and the divisional P/Ls. check the marking guide, you'll probably get 1/2 a mark for each correct simple calculation you did up to a max.
@@SteveWillisACCA okay so basically i can expect around 60% marks in it. Thanks for helping steve, Hoping for a pass, should have revisited your video once before going for the exam, I would have got 100% marks their, made a very silly mistake, however only pass matters, thanks for helping Absolutely love your videos❤️
Hi Steve, can we just have the formula in the cell or do we need to do it like the model answers where they've added rows underneath column A to show the workings written out?
I’m about to write my pm . Few hours to go . I’m hoping to pass 😊
hope it went well! fingers crossed!
@@SteveWillisACCA yes I think I did my best. Can’t say much till the results . Wrote 3 papers . Tax , fm and pm together 😅😅
@@banku3708 how are u feeling now
@@banku3708 Have u passed all?
@@banku3708 How did it go for you?
Hi Steve, Why do we not add the internal transferred sales to the group?
Because it's a cost for the other entity--net effect zero for the group. Think of it as if they are departments in the same company--the company only makes a profit on external sales.
Hi Steve amazing lecture ,
I have question about Transfer pricing
If there is saving when internal transfer.
Will it affect minimum price or maximum price??
Hey there, it will affect the minimum transfer price: the starting place in transfer pricing discussion is to find the minimum price, which is marginal cost + opportunity cost. Marginal cost is variable cost.
The maximum transfer price would be the external market price.
@@SteveWillisACCA hi Steve. Do you have a video on how to solve such a transfer pricing qn. Where the answer does not require a profit statement
Please B and C part ?
Hi steve, if i prepare the profit statement on unit cost basis and then multiply the unit contribution by number of units, and then subtract fixed cost, to arrive at group profit(i understand that i would loose marks for divisional total profit - .5 each)
Will the rest be considered correct?
I am very very worried please reply
Requesting your help.
If you did what you said and accurately calculated the group profit, you'd get marks. But you'd miss the marks for the internal sales and the divisional P/Ls. check the marking guide, you'll probably get 1/2 a mark for each correct simple calculation you did up to a max.
@@SteveWillisACCA okay so basically i can expect around 60% marks in it.
Thanks for helping steve,
Hoping for a pass, should have revisited your video once before going for the exam,
I would have got 100% marks their, made a very silly mistake, however only pass matters, thanks for helping
Absolutely love your videos❤️
@@SteveWillisACCA Hi Steve, cleared PM at 62 all because of you. Thanks alot. Love you.
Hi Steve, can we just have the formula in the cell or do we need to do it like the model answers where they've added rows underneath column A to show the workings written out?
Just the formula in the cell--don't show it again.
Hi Steve,
I couldn't find a attachment of these Question.
drive.google.com/file/d/19t4EeCNc_n9FzH6y6Coch8z4hUaH2eiA/view?usp=share_link
sorry about that--it's in the video description now.