Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from...

 

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Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. 27. How much would Division 3's income from operations increase? a. $150,000 b. $50,000 c. $32,000 d. $72,000 28. How much would Division 6's income from operations increase? $8,000 b. $15,000 a. c. $80,000 d. $150,000 29. How much would Square Yard Products total income from operations increase? $32,000 b. $112,000 a. c. $80,000 d. $150,000 ABC Corporation has three service departments with the following costs and activity base: Service Department Graphics Production Accounting Personnel Department Activity Base for Allocation of copies # of invoices processed # of employees Cost $200,000 $500,000 $400,000 ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows: Micro Масго Direct Revenues Direct Operating Expenses # of copies made # invoices processed #of employees Super $650,000 S100.000 50,000 500 S700,000 $50,000 20,000 $850,000 $70,000 30,000 700 800 130 145 125 30. What is the service department charge rate for Graphics Production? $2.00 b. $10.00 c. $6.66 d. $.50 a. Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. 27. How much would Division 3's income from operations increase? a. $150,000 b. $50,000 c. $32,000 d. $72,000 28. How much would Division 6's income from operations increase? $8,000 b. $15,000 a. c. $80,000 d. $150,000 29. How much would Square Yard Products total income from operations increase? $32,000 b. $112,000 a. c. $80,000 d. $150,000 ABC Corporation has three service departments with the following costs and activity base: Service Department Graphics Production Accounting Personnel Department Activity Base for Allocation of copies # of invoices processed # of employees Cost $200,000 $500,000 $400,000 ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows: Micro Масго Direct Revenues Direct Operating Expenses # of copies made # invoices processed #of employees Super $650,000 S100.000 50,000 500 S700,000 $50,000 20,000 $850,000 $70,000 30,000 700 800 130 145 125 30. What is the service department charge rate for Graphics Production? $2.00 b. $10.00 c. $6.66 d. $.50 a.

Answer rating: 100% (QA)

Total Cost to be paid to the outside supplier 40000 units x 5 per unit 200000 Transfer Price t... View the full answer