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Case
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Reference no. 9B02B001
Published by: Ivey Publishing
Originally published in: 2002
Version: 2002-04-03
Length: 10 pages
Data source: Field research

Abstract

Stone Group Corp, one of the largest electronics manufacturers and distributors in China, practices transfer pricing, an allocation process that assigns costs, sales revenue and gross profits to each of its five divisions. When a customer approaches the company with an order and requests a recommendation for a multimeter model, the general manager of the Instruments Division is asked to quote a transfer price for the multimeters. He must decide whether to sell some of his stock to another Stone division (losing the sales revenue, but perhaps gaining the gross profit needed to meet the division''s monthly profit quota) or to keep the product in stock for possible sales (and greater revenue and profit) during the company''s fourth quarter. There is a simplified Chinese version available ''9B02BC01''.
Location:
Size:
Large
Other setting(s):
2001

About

Abstract

Stone Group Corp, one of the largest electronics manufacturers and distributors in China, practices transfer pricing, an allocation process that assigns costs, sales revenue and gross profits to each of its five divisions. When a customer approaches the company with an order and requests a recommendation for a multimeter model, the general manager of the Instruments Division is asked to quote a transfer price for the multimeters. He must decide whether to sell some of his stock to another Stone division (losing the sales revenue, but perhaps gaining the gross profit needed to meet the division''s monthly profit quota) or to keep the product in stock for possible sales (and greater revenue and profit) during the company''s fourth quarter. There is a simplified Chinese version available ''9B02BC01''.

Settings

Location:
Size:
Large
Other setting(s):
2001

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