How to opt 3 Option in Problem no 11 Of Transfer Price in PM page no 7.36
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Costing ca final tp problem 11
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1. if PQR sell 30000 units to external market, then transfer to RPQ would be Nil.
2. if PQR sell 20000 units then transfer to RPQ may be 10000 or 5600 units.
3. if PQR sell 10000 units to market then it transfer 20000 units as maximum quantity but RPQ has highest demand 14400 units so it may transfer 14400, 10000 or 5600 units as per RPQ demands.
4. In any case demand of 5600 units in RPQ will contribute overall lowest amount. So it not taken for alternative Options.
2. if PQR sell 20000 units then transfer to RPQ may be 10000 or 5600 units.
3. if PQR sell 10000 units to market then it transfer 20000 units as maximum quantity but RPQ has highest demand 14400 units so it may transfer 14400, 10000 or 5600 units as per RPQ demands.
4. In any case demand of 5600 units in RPQ will contribute overall lowest amount. So it not taken for alternative Options.
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