Assume, for this question only, that the Computer Chip Division is selling all that it can produce to external buyers for P50 per unit. How would overall corporate profits be affected if it sells 4,000 units to the Computer Division at P45? (Assume that the Computer Division can purchase the super chip from an outside supplier for P45.) * Computer Solutions Corporation manufactures and sells various high-tech office automation products. Two divisions of Computer Solutions Corporation are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a "super chip," that can be used by both the Computer Division and other external customers. The following information is available on this month's operations in the Computer Chip Division: Selling price per chip Variable costs per chip Fixed production costs P50 P20 P60,000 P90,000 10,000 chips 6,000 chips O chips Fixed SG&A costs Monthly capacity External sales Internal sales Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead pays P45 to an external supplier for the 4,000 chips it needs each month. O no effect O 40,000 larger P20,000 increase O 20,000 decrease O 90,000 increase

Assume, for this question only, that the Computer Chip Division is selling all that it can produce to external buyers for P50 per unit. How would overall corporate profits be affected if it sells 4,000 units to the Computer Division at P45? (Assume that the Computer Division can purchase the super chip from an outside supplier for P45.) * Computer Solutions Corporation manufactures and sells various high-tech office automation products. Two divisions of Computer Solutions Corporation are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a "super chip," that can be used by both the Computer Division and other external customers. The following information is available on this month's operations in the Computer Chip Division: Selling price per chip Variable costs per chip Fixed production costs P50 P20 P60,000 P90,000 10,000 chips 6,000 chips O chips Fixed SG&A costs Monthly capacity External sales Internal sales Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead pays P45 to an external supplier for the 4,000 chips it needs each month. O no effect O 40,000 larger P20,000 increase O 20,000 decrease O 90,000 increase

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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