Acompany established a branch to sell automobile seat covers. the company purchases these covers and stores them in a warehouse. the covers are then shipped from the warehouse to both the home office and the new branch, fob (free on board) destination. home office management is responsible for setting the transfer price of the covers charged to the branch. per-unit costs of the covers are: $ 60.00 purchase price $ 2.50 shipping cost to warehouse $ 3.00 handling cost, including $1 allocated administrative overhead $ 3.50 shipping cost to branch, paid by home office according to the general transfer pricing formula given in the text, the minimum transfer price that home office should charge the branch is:

answer; ///i believe the correct two answer are (1) paid in capital; and (2) earned   capital; good luck

answer; experimentation;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.