In this multimedia case, Bruce Wood an executive with ARCP deals with the challenge of this asphalt manufacturing company selling both internally to its road construction firm as well as externally to third party customers. The sales to external customers were fetching a higher selling price so ARCP needed to calculate what its optimal transfer price was going to be. Previously the ownership group had observed that the demand from these two groups was far in excess of what its seven hundred ton per day plant was able keep up with. So they made the decision to purchase a new plant that was able to produce two thousand tons per day.
25 to 500
Greater than $25 million
Type of Entity
Level of Difficulty
Enhance cost accounting knowledge
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