Division A manufactures electronic circuit boards. The boards can be sold either to Division B of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board Variable cost per circuit board Number of circuit boards: Produced during the year Sold to outside customers Sold to Division B $ 184 $ 113 20,000 15,100 4,900 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic instrument manufactured by that division (one board per instrument). Division B incurred $300 in additional variable cost per instrument and then sold the instruments for $620 each. Required: 1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,000 circuit boards. Next year, Division B wants to purchase 5,900 circuit boards from Division A rather than 4,900. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. Sales Expenses: Added by the division Transfer price paid Division A Division B Total Company Total expenses 0 0 0 Net operating income $ 0 $ 0 $ 0 Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board Variable cost per circuit board Number of circuit boards: Produced during the year Sold to outside customers Sold to Division B $ 184 $ 113 20,000 15,100 4,900 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic instrument manufactured by that division (one board per instrument). Division B incurred $300 in additional variable cost per instrument and then sold the instruments for $620 each. Required: 1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,000 circuit boards. Next year, Division B wants to purchase 5,900 circuit boards from Division A rather than 4,900. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. Sales Expenses: Added by the division Transfer price paid Division A Division B Total Company Total expenses 0 0 0 Net operating income $ 0 $ 0 $ 0
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Penelope Pundit, an economics reporter, states that the European Union (EU) is increasing its productivity very rapidly in all industries. She claims that this productivity advance is so rapid that...
-
On December 15, 2004, Las Vegas Sands Corp., owner of the Venetian Hotel in Las Vegas, conducted an initial public offering of 23.8 million shares of $0.001 par value common stock at a price of $29...
-
On December 31, 2016, Kellams Company made the following adjusting entries for its annual accounting period: Required: Prepare whatever reversing entries are appropriate. Depreciotion Expense 2,400...
-
Extraction is almost invariably a ternary mass transfer problem instead of binary because of partial miscibility of diluent and solvent. Typically, as solute is removed from diluent, solvent is less...
-
Nicole Lawrence opened a business called Nickies Neat Ideas in January 20--. Set up T accounts for the following accounts: Cash; Accounts Receivable; Office Supplies; Computer Equipment; Office...
-
Alternative dividend policies Over the last 10 years, a firm has had the earnings per share shown in the following table: a. If the firm's dividend policy were based on a constant payout ratio of 40%...
-
eBook Problem Walk-Through Project L requires an initial outlay at t = 0 of $90,373, its expected cash inflows are $14,000 per year for 11 years, and its WACC is 12%. What is the project's IRR? Round...
-
How would I go about calculating the impact of uncertain future inflation on NPV of a proposed ambulatory surgery center based on given levels of net patient revenue inflation and levels of cost...
-
1. [10] Find p1-p2, the pressure difference between the two arms of the manometer shown below. The left-hand liquid has a density of 700 kg/m, and the right-hand liquid has a density of 1000 kg/m. Pi...
-
Williams Academic Medical Center Balance Sheet December 31, 20X0 and 20X1 (in thousands) 20X1 Current assets Cash and cash equivalents Patient accounts receivables, net Inventories Other current...
-
Discuss how you can apply that concept of Classroom management in my teaching or professional life with four references
-
Since the federal securities laws were put into place, two main criticisms have persisted. First, some scholars have argued that regulators at the SEC, like all bureaucrats, do not pursue the public...
-
Suppose that the electrical potential at the point (x, y, z) is E(x, y, z) = x + y - 2z. What is the direction of the acceleration at the point (1,3,2)?
-
Explain the general format and give examples of the data that would appear on (a) a sales order, (b) a bill of materials, and (c) a job order cost sheet.
-
Why can we say that the sale of a manufactured product is recorded at two different amounts?
-
Lyle Manufacturing Company applies manufacturing overhead at the rate of 150% of direct labor cost. During October 2019, Lyle incurred \($82,000\) of direct labor costs and \($120,000\) of...
Study smarter with the SolutionInn App