Question: Based on Dart Industries data in Exercise assume that a transfer price of $ 158 has been established and that 40,000 units of materials are

Based on Dart Industries’ data in Exercise assume that a transfer price of $ 158 has been established and that 40,000 units of materials are transferred, with no reduction in the Components Division’s current sales.
In Exercise Materials used by the Instrument Division of Dart Industries are currently purchased from outside suppliers at a cost of $ 180 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $ 125 per unit.
a. How much would Dart Industries’ total income from operations increase?
b. How much would the Instrument Division’s income from operations increase?
c. How much would the Components Division’s income from operations increase?
d. If the negotiated price approach is used, what would be the range of acceptable transfer prices and why?

Step by Step Solution

★★★★★

3.37 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Increase in Dart Industries Market Variable Cost Units Income from Operations Price per Unit Trans... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

312-B-M-A-P-E (1399).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Based on the data presented in Exercise assume that Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product pricing. In Exercise, Smart Stream Inc. uses the...

Based on the data presented in Exercise assume that Smart Stream Inc. uses the variable cost concept of applying the cost- plus approach to product pricing. In Exercise, Smart Stream Inc. uses the...

Based on the data in Exercise assume that management has established an 8% minimum acceptable rate of return for invested assets. In Exercise, The income from operations and the amount of invested...

Decision on transfer pricing OBJ. 5 Based on XPort Industries data in Exercise assume that a transfer price of $190 has been established and that 60,000 units of materials are transferred, with no...

Materials used by the Truck Division of Goldman Motors are currently purchased from the outside suppliers at a cost of $310 per unit. However, the same materials are available from the Components...

Based on XPort Industries data in Exercise 19, assume that a transfer price of $190 has been established and that 60,000 units of materials are transferred, with no reduction in the Components...

Materials used by the Instrument Division of Dart Industries are currently purchased from outside suppliers at a cost of $180 per unit. However, the same materials are available from the Components...

Based on XPort Industries data in Exercise 2420, assume that a transfer price of $190 has been established and that 60,000 units of materials are transferred, with no reduction in the Components...

Based on XPort Industries' data in Exercise 23-20 assume that a transfer price of $190 has been established and that 60,000 units of materials are transferred, with no reduction in the Components...

Based on T_Kong Industries' data in Exercise 24-20, assume that a transfer price of $160 has been established and that 50,000 units of materials are transferred, with no reduction in the Components...

Have you ever experienced inequity in a job or a class? How did it affect you?

Let g(z) = 6 - z. Find each of the following: g(7) g(3) 7-3 (A) (B) - g(3 + h) g(3) h (C) lim h0 - g(3 + h) g(3) h

The _ _ _ _ _ object is the in - memory representation of the data in the database.

Which of the following is not correct concerning computer software purchased by Gultch Company from Softtouch Company? Softtouch originally created this software. a. Gultch can make backup copies in...

The following transactions were completed by The Irvine Company during the current fiscal year ended December 31: Feb. 8. Received 40% of the $18,000 balance owed by DeCoy Co., a bankrupt business,...

A $100 par value 10 year bond provides 5% semiannual coupons. The yield rate is 4% convertible semiannually. What is the flat price (i.e., the money that actually changes hands if the bond is sold,...

The following quotes were observed for options on a given stock on November 1 of a given year. These are American calls except where indicated. Calls Puts Strike Nov Dec Jan Nov Dec Jan 105 8.40 10...

Which of these represents a cash outflow for a project? a) a sunk cost b)Increase in accounts receivable c)Depreciation d)Accrued expenses