Transfer Pricing and Responsibility Centers

Please read through the attachments & complete the assignment according to the “Assignment Expectations”: (1 page Excel sheet, 4 page word document with Memo and Short Essay) Each submission should include two files: (1) An Excel file; and (2) A Word document (memo/short essay).

(1) Excel File: Set up Table to compute the difference between the current situation and the proposal for Divisions A and B. Compute the operating incomefor DivisionC under the currentagreement and the proposed agreement. Is the revised agreement a good idea? Support your answer with computations. (see Case Assignment).

(2) Word document: shows the memo first (Write a 4- or 5-paragraph memo to the division manager explaining the analysis performed. Start with an introduction and end with a recommendation. Each of the four or five paragraphs should have a heading. Then write a short essay starting with a intro, ending with an summary using heading’s to evaluate and discuss the implications of the following transfer pricing policies: (1. Transfer price= cost plus a mark-up for the selling division 2. Transfer price= fair market value 3. Transfer price= price negotiated by the managers. Why is transfer pricing such a significant issue both from a financial  and managerial perspective? …. Have an Intro, Conclusion, in-text citations and References. Please show clearly in the written report/memo and excel the questions from the Module 3- Case Assignment being answered, answer each question directly & entirely. Pages 4 and 1 excel sheet for a total of 5 pages.