Dickson Group has two divisions. The following statement shows the financial result of each division for...

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Dickson Group has two divisions. The following statement shows the financial result of each division for the year ended 2020. Year 2020 Product type Sales volume Division B Equipment B 72,000 units $000 720,000 Sales revenue Variable costs Contribution Fixed costs Operating profit 278,000 #include buying components from Division A. (382,000 )# 338,000 60,000 Division A Component A 140,000 units 5000 196,000 Division A Current production capacity Sold to Division B (140,000) 56,000 (20,000) 36,000 Division A manufactures one type of component only. It sells the components to external customers and also to Division B. The following information is available: 140,000 units 72,000 units Sold to external markets 68,000 units External market demand for Component A Market price $1500 per unit The current policy of the group is that internal sales 72,000 units should be transferred at their opportunity cost. Consequently, some components were transferred to Division B at the market price $1500 and some were transferred at variable cost of Component A. 112,000 units Required: (a) Prepare an analysis of the sales made by Division A that shows clearly, in units and in $, the internal and external sales made during the year 2020. (10 marks) Dickson Group has two divisions. The following statement shows the financial result of each division for the year ended 2020. Year 2020 Product type Sales volume Division B Equipment B 72,000 units $000 720,000 Sales revenue Variable costs Contribution Fixed costs Operating profit 278,000 #include buying components from Division A. (382,000 )# 338,000 60,000 Division A Component A 140,000 units 5000 196,000 Division A Current production capacity Sold to Division B (140,000) 56,000 (20,000) 36,000 Division A manufactures one type of component only. It sells the components to external customers and also to Division B. The following information is available: 140,000 units 72,000 units Sold to external markets 68,000 units External market demand for Component A Market price $1500 per unit The current policy of the group is that internal sales 72,000 units should be transferred at their opportunity cost. Consequently, some components were transferred to Division B at the market price $1500 and some were transferred at variable cost of Component A. 112,000 units Required: (a) Prepare an analysis of the sales made by Division A that shows clearly, in units and in $, the internal and external sales made during the year 2020. (10 marks)

Answer rating: 100% (QA)

To analyze the sales made by Division A in the year 2020 we need to calculate the internal and external sales quantities and revenues Given the information provided we can break down the analysis as f... View the full answer