Management of Great Springs Bottled Water Company has asked you, the controller, to develop a transfer...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Management of Great Springs Bottled Water Company has asked you, the controller, to develop a transfer pricing system for the company. The Transportation Department of the company sells all of its product to the Bottling Department of the company. Thus, the Transportation Department's sales become the Bottling Department's cost of goods sold. Using the transfer prices below, prepare an income statement for each of the transfer prices by filling in the missing numbers in the provided income statement based on each transfer price and calculate the operating income/loss percentage. Cost-based Market-based Negotiated Gallons transferred $0.62 $0.74 $0.70 268,00 GREAT SPRINGS BOTTLED WATER Income Statement Month Ending August 31, 2018 Transportation Bottling Sales $286,000 Cost of goods sold Gross profit Fuel/utility expense Wages expense Costs allocated from corporate Total expenses Operating income/(loss) $ Operating income/(loss) % $89,627 $15,000 $3,200 43,090 17,236 $75,326 57,200 15,000 $75,400 ? ? Management of Great Springs Bottled Water Company has asked you, the controller, to develop a transfer pricing system for the company. The Transportation Department of the company sells all of its product to the Bottling Department of the company. Thus, the Transportation Department's sales become the Bottling Department's cost of goods sold. Using the transfer prices below, prepare an income statement for each of the transfer prices by filling in the missing numbers in the provided income statement based on each transfer price and calculate the operating income/loss percentage. Cost-based Market-based Negotiated Gallons transferred $0.62 $0.74 $0.70 268,00 GREAT SPRINGS BOTTLED WATER Income Statement Month Ending August 31, 2018 Transportation Bottling Sales $286,000 Cost of goods sold Gross profit Fuel/utility expense Wages expense Costs allocated from corporate Total expenses Operating income/(loss) $ Operating income/(loss) % $89,627 $15,000 $3,200 43,090 17,236 $75,326 57,200 15,000 $75,400 ? ?
Expert Answer:
Answer rating: 100% (QA)
Answer Below the income statement as per all the options Option 1 Pu Price as per cost based formula ... View the full answer
Related Book For
Cost Accounting Foundations and Evolutions
ISBN: 978-1111626822
8th Edition
Authors: Michael R. Kinney, Cecily A. Raiborn
Posted Date:
Students also viewed these accounting questions
-
The Coca-Cola Company has asked you to conduct Internet focus groups with heavy users of soft drinks. Explain how you would identify and recruit such respondents.
-
From the following account information, prepare an income statement cost of goods sold section in proper form: Freight-In, $300; Merchandise Inventory, 12/31/14, $9,000; Purchases Discounts, $900;...
-
From the following account information, prepare an income statement cost of goods sold section in proper form: Freight-In, $400; Merchandise Inventory, 12/31/17, $9,500; Purchases Discounts, $800;...
-
In a bank reconciliation, deposits in transit are: (a) deducted from the book balance. (b) added to the book balance. (c) added to the bank balance. (d) deducted from the bank balance.
-
Ethel and Egbert have decided to invest in the futures market. Both entered into 1,000 futures contracts, which required a $30,000 initial margin. The maintenance margin for each investor is $22,500....
-
A U-tube contains water in the right arm, and another liquid in the left arm. It is observed that when the U-tube rotates at 50 rpm about an axis that is 15 cm from the right arm and 5 cm from the...
-
In a two-dimensional, incompressible flow field, the \(x\) component of velocity is given by the equation \(u=2 x\). (a) Determine the corresponding equation for the \(y\) component of velocity if...
-
Use Worksheet 6.1. Rebecca Collins is evaluating her debt safety ratio. Her monthly take-home pay is $3,320. Each month, she pays $380 for an auto loan, $120 on a personal line of credit, $60 on a...
-
Sarah Custard's is a pie shop that specializes in custard and fruit pies. It makes delicious pies, and sells them at reasonable prices so that it can sell all the pies it makes in a day. Every dozen...
-
A survey by the Arthur Andersen Enterprise Group/ National Small Business United attempted to determine what the leading challenges are for the growth and survival of small businesses. Although the...
-
Assume that you have a USER DEFINED PRIMITIVE (UDP) called MUX4to1 Io 11 12 13 MUX4to1 module MUX16to1 ( S1 SO Complete the following Verilog code to provide a Structural Representation for a 16-to-1...
-
Some claim that fervent recycling is the result of a "religion" of conservation that makes people feel good despite a lack of concrete reason. Suppose that the curves in Figure 8.5 exclude the value...
-
The following diagram shows the structure of cost and demand facing a monopolistically competitive firm in the short run. a. Identify the following on the graph and calculate each one. i. ...
-
Society is made up of two individuals, Bert and Ernie, whose demands for public good A are given in Figure 1. Assuming that the public good can be produced at a constant marginal cost of $7, what is...
-
The following table shows the relationship between utility and income for three individuals. Show each relationship graphically and explain whether each person is risk-averse, risk-neutral, or...
-
Determine (a) the absolute maximum values of shear and moment in the beam produced by the wheel loads and \((b)\) the maximum value of moment when the middle wheel is positioned at the center of the...
-
Define the software tools that would be necessary in department to perform its activities. Operations department
-
How many years will it take a $700 balance to grow into $900 in an account earning 5%?
-
How does an actual costing system differ from a normal costing system? What advantages does a normal costing system offer?
-
Birmingham Contractors uses a job order costing system. In May 2010, the company made a $3,300,000 bid to build a pedestrian overpass over the beach highway at Gulf Shores, Alabama. Birmingham...
-
Routine maintenance services are provided by Latamore Industries to oil and gas firms in their production facilities. Although many of the client services are relatively unique, some services are...
-
Using the data in exercise 2, determine how many units of resources the firm will want to acquire. Data from in exercise 2 Using the information in the following table, calculate the marginal revenue...
-
What does it mean to say that the demand for resources is a derived demand? Is the demand for all goods and services a derived demand?
-
Using the information in the following table, calculate the marginal revenue product (MRP = MPP MR). Unit of Resources Total Resource Output Price Price 1 10 $5 $10 2 25 $5 $10 345 35 $5 $10 40 $5...
Study smarter with the SolutionInn App