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Exercise 11A-1 Transfer Pricing Basics...

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Exercise 11A-1 Transfer Pricing Basics [LO11-5] Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units $43 $ 18 55,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 9,000 speakers per year. It has received a quote of $30 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits

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