Stills Company expects the following results: Division A Division B $1,600,000 Sales A: (10,000 x $160)...

 

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Stills Company expects the following results: Division A Division B $1,600,000 Sales A: (10,000 x $160) B: (25,000 x $72) Variable costs Contribution margin Fixed costs Profit 1.360.000 $240,000 160,000 $ 80.000 $1,800,000 900,000 $ 900,000 360,000 540.000 Included in Division A's costs are 10,000 units of a subcomponent purchased from an outside supplier for $45. The managers have recently initiated negotiations for Division B to supply the components to Division A. Division B has a total capacity of 40,000 units. Required: a. Prepare a new segment reporting statement for Stills, assuming an internal transfer at the maximum transfer price. b. Prepare a new segment reporting statement for Stills, assuming an internal transfer at the minimum transfer price. Stills Company expects the following results: Division A Division B $1,600,000 Sales A: (10,000 x $160) B: (25,000 x $72) Variable costs Contribution margin Fixed costs Profit 1.360.000 $240,000 160,000 $ 80.000 $1,800,000 900,000 $ 900,000 360,000 540.000 Included in Division A's costs are 10,000 units of a subcomponent purchased from an outside supplier for $45. The managers have recently initiated negotiations for Division B to supply the components to Division A. Division B has a total capacity of 40,000 units. Required: a. Prepare a new segment reporting statement for Stills, assuming an internal transfer at the maximum transfer price. b. Prepare a new segment reporting statement for Stills, assuming an internal transfer at the minimum transfer price. Stills Company expects the following results: Division A Division B $1,600,000 Sales A: (10,000 x $160) B: (25,000 x $72) Variable costs Contribution margin Fixed costs Profit 1.360.000 $240,000 160,000 $ 80.000 $1,800,000 900,000 $ 900,000 360,000 540.000 Included in Division A's costs are 10,000 units of a subcomponent purchased from an outside supplier for $45. The managers have recently initiated negotiations for Division B to supply the components to Division A. Division B has a total capacity of 40,000 units. Required: a. Prepare a new segment reporting statement for Stills, assuming an internal transfer at the maximum transfer price. b. Prepare a new segment reporting statement for Stills, assuming an internal transfer at the minimum transfer price. Stills Company expects the following results: Division A Division B $1,600,000 Sales A: (10,000 x $160) B: (25,000 x $72) Variable costs Contribution margin Fixed costs Profit 1.360.000 $240,000 160,000 $ 80.000 $1,800,000 900,000 $ 900,000 360,000 540.000 Included in Division A's costs are 10,000 units of a subcomponent purchased from an outside supplier for $45. The managers have recently initiated negotiations for Division B to supply the components to Division A. Division B has a total capacity of 40,000 units. Required: a. Prepare a new segment reporting statement for Stills, assuming an internal transfer at the maximum transfer price. b. Prepare a new segment reporting statement for Stills, assuming an internal transfer at the minimum transfer price.

Answer rating: 100% (QA)

a Division A Sales A10000160 1600000 B 2500072 B Transfer 1000045 V... View the full answer