PROFIT CENTER ASSIGNMENT

North Country Auto, Inc.

North Country Auto, Inc.

Answer 1

Overhead expenses have been converted into for the complete units.

Thus for this one transaction the Net Profit will be $ 10, 78,000/-

Assumption: Variable Cost for used cars is taken as 87.86% of Sales (as derived from the financial statement).

Answer 2

The transfer pricing system should be operated at full retail. But at the same time care should be taken that the retail transfer price of the repairs should not encourage the used car sales manager to avoid the possibility of losses in her department by wholesaling trade in cars that could be ...