Question: QUESTION 31 Dukes Computing Systems Dukes Computing Systems manufactures and sells various computer products and has two decentralized divisions: (1) Production and (2) Marketing. The

QUESTION 31 Dukes Computing Systems Dukes Computing Systems manufactures and sells

QUESTION 31 Dukes Computing Systems Dukes Computing Systems manufactures and sells various computer products and has two decentralized divisions: (1) Production and (2) Marketing. The Marketing Division has always purchased a particular motherboard from Production at $65 per unit. The Production Division is considering raising the price to $75 per unit. The Production Division's costs related to the motherboard production are as follows: Variable costs per unit: $65 Monthly fixed costs: $10,000 The Marketing Division handles the promotion and distribution of the motherboard purchases from the Production Division and sells each motherboard for $125. Marketing Division incurs monthly fixed costs of $5,000. Marketing Division sells 2,000 units per month. Marketing Division can buy the same motherboard from outside suppliers for $75. The Production Division is operating at maximum capacity because of strong worldwide demand for the product and the Production Division can sell all it produces to outside customers for $75 per motherboard. What should be the motherboard transfer price between the Production Division and Marketing Division in order for Dukes' to optimize profits? A. $55 B. $125 C. $65 D. $75

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Dukes Computing Systems Dukes Computing Systems manufactures and sells various computer products and has two decentralized divisions: (1) Production and (2) Marketing. The Marketing Division has...

Colonial Computing Systems Colonial Computing Systems manufactures and sells various computer products and has two decentralized divisions: (1) Production and (2) Marketing. The Marketing Division...

25. Which of the following is managements challenge when setting transfer prices? a. Ensuring the buyer has goal congruence with respect to the organizations goals. b. Ensuring the seller has goal...

Colonial Computing Systems Colonial Computing Systems manufactures and sells various computer products and has two decentralized divisions: (1) Production and (2) Marketing. The Marketing Division...

17. Ravenclaw Hardware Systems manufactures and sells various computer products, and has two decentralized divisions: (1) Production and (2) Marketing. The Marketing Division has always purchased a...

The Burger Shack manufactures three types of burgers: lamb, beef and chicken. Each product uses similar quantities of direct materials, but different types. However, the same type of direct labour...

Dukes Computing Systems manufactures and sells various computer products and has two decentralized divisions: (1) Production and (2) Marketing. The Marketing Division has always purchased a...

Question 1.(30 marks) The Burger Shack manufactures three types of burgens: lamb, beef and chicken. Each product uses similar quantities of direst materials, but different types. However, the same...

Course Name: Cultural Diversity Management. Study the case study and answer all questions. Case 4 Hailing a New Era: Haier in Japan As one of the most valuable brands in China, Haier designs,...

Answer the questions below for this year and last year, using your SEC 10-K: Link to SEC 10-K:http://d1lge852tjjqow.cloudfront.net/CIK-0000315189/ceea88ae-ba2b-4204-9b4a-2c9a06e40401.pdf?noexit=true...

Write a paper on Risk and Reward Assessment and discuss the risks and rewards to your client as they relate to the management problem (Coffee Shop) When reflecting on business risks for the...

One mechanism for the depletion of ozone in the stratosphere is proposed as follows: CI + 03 CIO + 02 CIO + O CI + 02 Identify any catalysts and intermediates in the reaction. Cl is a catalyst,...

Old wine glasses often appear cloudy because they have many small cracks on their surface. The cracks are caused by differences in the rate of diffusion of sodium ions and hydrogen ions in the glass....

SIMAD UNIVERSITY Class: BACC25 Subject: Islamic Accounting Instructions: a) Follow The Instructions. Midterm Exam Instructor: All Ibrahim Date: 6-4-2022 b) You Have 1.5 Hrs. To Complete This Test. c)...

(Appendices) How is this affected by business policies concerning prices and credit sales? LO2

(Appendices) The Bureau of Labor Statistics provides detailed information on unemployment at the national, state, and local level. Go to www.bls.gov/lau/home.htm. See Latest Numbers and answer the...

(Appendices) Forrest, age 23, was honorably discharged from the U.S. Marine Corps after four years, which included two tours of duty in Iraq. He was severely wounded when his platoon engaged in a...