--/1Question 15esView PoliciestionsCurrent Attempt in ProgressUS SupportThe Heating Division of Kobe International produces a heatingelement that it sells to its customers for $44 per unit. Its variablecost per unit is $25, and its fixed cost per unit is $12. Topmanagement of Kobe International would like the Heating Divisionto transfer 14,600 heating units to another division within thecompany at a price of $30. The Heating Division is operating at fullcapacity. What is the minimum transfer price that the HeatingDivision should accept?tral65Minimum transfer price$8:48 PM49)11/18/2019Chpfofninsprt scf124homedeleteendpg up9numbackspacelock78

Calculate the opportunity cost (contribution margin).

Answered: --/1 Question 15 es View Policies tions…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 9.4 East Meets West Ltd. is a Canadian company with a fully owned subsidiary in the UK. The UK subsidiary produces a component for off shore gas compressors that are sold in Canada. The components have a variable cost of 1,700 Euros and a full cost of 2,100 Euros. The 2,000 components required can be purchased in Canada for $3,500. Assume the minimum transfer price allowed by the Canadian tax authorities is the variable cost and the maximum is the market value. Also assume operating income in each country is equal to taxable income. One Euro is worth $1.45 Canadian. The marginal tax rate in Canada is 25% and in Ireland 12.5%. Required: What transfer price should be set for East Meets West Ltd. to minimize its total income taxes? Show your calculations. If East Meets West Ltd. desires to minimize its total income taxes, calculate the amount of tax liability in each country in Canadian dollars.
Q25
Question 45 Assume a division of HP Inc currently makes 50,000 circuit boards per year used in producing diagnostic electronic instruments at the cost of 150 per board, considering of variable costs per unit of $35 and feed costs per unit of $15. Further, assume Sarmina Corporation offers to sell HP the 50.000 circuit boards for $50 each if HP accepts this offer the facilities currently used to make the boards could be rented to one of HP's suppliers for $75,000 per year. In addition, $8 per unit of the fixed overhead applied to the circuit boards would be totally eliminated. Should HP outsource this component from Sanmina Corporation Support your answer with relevant cost calculations. Make-or-Buy) Decision.
6
Return to question Lost Mine has offered to buy 3,100 of the US umbrellas at a price of $32 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost $13.00 7.00 9.00 2.50 $31.50 $40.00 Regular. sales price Required: 1. Compute the incremental profit (or loss) from accepting the special order. 2. Should Mohave accept the special order? 3. Suppose that the special order had been to purchase 3,600 umbrellas får $28.00 each. Recompute the incremental profit (or loss) from accepting the special order under this scenario. 4. Assume that Mohave is operating at full capacity. Calculate the special-order price per unit at which Mohave would be indifferent between accepting or rejecting the special order. X Answer is complete but not entirely correct. Complete this question by entering your answers in…
a1
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Problem 17.049: Calculate the after-tax AW of two alternatives A European candy manufacturing plant manager must select a new irradiation system to ensure the safety of specific ingredients, while being economical. The two alternatives available have the following estimates: System First Cost, $ CFBT, $ per Year Life, Years A -115,000 60,000 3 B -70,000 20,000 5 The company is in the 35% tax bracket and assumes classical straight line depreciation for alternative comparisons performed at an after-tax minimum acceptable rate of return (MARR) of 7% per year. A salvage value of zero is used when depreciation is calculated; however, system B can be sold after 5 years for an estimated 20% of its first cost. System A has no anticipated salvage value. Determine which is more economical using an annual worth (AW) analysis worked by hand. The annual worth analysis for system A is determined to be $ 8590.16 The annual worth analysis for system B is determined to be $ -4284.96 System A is…
Question 2 In Bradford Ltd, there are two divisions: Transportation and Refining Divisions. The below is relevant information: 1. Transportation Division: The purchase price of crude oil from fields under a long-term contract is £13 per barrel, and Transportation Division purchases crude oil in the North Sea and also transports the crude oil to London. Other costs: Variable costs per barrel of crude oil £2 Fixed costs per barrel of crude oil £3 Total £5 The pipeline from the North Sea to London can carry 35,000 barrels of crude oil per day. 2. Refining Division: The external purchase price of crude oil from outside suppliers is £23 per barrel. The Refining Division is buying 20,000 barrels a day from the…

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