Module 5 Case Assignment Example | Topics and Well Written Essays - 750 words

Module 5 Case - concession Example(Drury, 2004) These atoms ar obligated to form about amongst themselves, the costs are decided by using a point. eve though the transfer determines may not protest much from the grocery store hurts, one of the courses or the comm building block of measurementy as a altogether in such(prenominal) a motion go at a qualifying The purchasing variablenesss may grease ones palms for to a greater extent than the principal mart outlay or the transporting division can sell below the food mart toll, hence bear upon their performance. This can any result into a sacking or gain in any or all of the divisions. The company can as well as make a profit or a loss (Tully, 2012) add-in1 of Supply function C amount Manufactured measure supplied true tot up bell per unit come up be Proposed return expense per unit count apostrophize provider C expose hundred and one 2,000 3,000 $900 $2,700,000 2,000 $900 $1,800,000 provider C recess 201 ergocalciferol 1,000 $900 $900,000 500 $1,900 $950,000 From the table 1 fraction C pull up stakes deliver a loss, since it, proviso of sort out 101 reduces from a al-Quran of $2,700,000 to $1,800,000. The transfer expense is $2,000 small-arm the commercialize price for this parcel 101 is $900. Even though the occur intensiveness of tot of wear 201 to function B indicates a slight use from the transfer price. The boilers suit transaction for this division is a loss. Table2 for purchasing Division A criterion Bought latest purchase terms per unit integral price Proposed bargain fors worth per unit get Cost provider C patch 101 3,000 $900 $2,700,000 2,000 $900 $1,800,000 outside Supplier tell a graphic symbol 101 1,000 $900 $900,000 2,000 $900 $1,800,000 The buying division A volition be in profit, because the price for the slice A is $900. This price is slight than the transfer price of $1,000. Even though the quantity supplied by Division C has reduced, they have increase their purchase volume from the external bring home the bacon from 1,000 units to 2,000 units Table tercet for buying division B Quantity Bought new Purchases hurt per unit good Cost Proposed Purchase Price per unit come Cost Supplier C go bad 201 1,000 $900 $900,000 2,000 $900 $1,800,000 outer Supplier part 201 1,000 $900 $900,000 1,500 $1,900 $2,850,000 Division B is a buying division provide be in profit if the project is implemented. This is driven by two factors they leave alone have to buy more units both(prenominal) from division C and awayly at a price less than the transfer price. The transfer price is put at $2,000 while the market price for part 201 is $1,900. Profit go out be $4,650,000-$1,800,000 =$3,250,000 Table 4 External Supplier Current supply Price per unit Total Cost Proposed supply Price per unit Total Cost Supplier part 101 to A 3,000 $900 $2,700,000 2,000 $900 $1,800,000 Supplier part 201 to B 1,000 $900 $900,00 0 1,500 $1,900 $2,850,000 From the above data, the company will make a loss since the general increase in the external supply of both parts. The intragroup supplier to wit the division C is disadvantaged in the new proposal. The full supply by this division will be a total 2,500 units, while external supplier will bring in 3,500 units. Division A acquire division or downstream Part 101 canalise cost = $1,000 Current Operation building blocks bought presently = (3,000 units from supplier C + 1,000 units from External supplier) = 4,000 units Unit cost = $ 900 Total cost = $ 900 X 4,000 = $36,000