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Assume you are the department 8 manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of you raw materials from department A, which sells only to department B (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. B $50,000 26,000 Sales Cost of goods sold Gross profit Utility expenses expense Costs allocated from corporate Total expenses Operating income/(loss) in dollars Operating income/(loss) in percentage 14% -9% Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley's Manufacturing. Determine the operating income for department B, assuming department A "sold" department 8 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place. New operating income/(loss) for department B in dollars -2,850 X New operating income/(loss) for department 8 in percentage

Assume you are the department 8 manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of you raw materials from department A, which sells only to department B (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. B $50,000 26,000 Sales Cost of goods sold Gross profit Utility expenses expense Costs allocated from corporate Total expenses Operating income/(loss) in dollars Operating income/(loss) in percentage 14% -9% Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley's Manufacturing. Determine the operating income for department B, assuming department A "sold" department 8 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place. New operating income/(loss) for department B in dollars -2,850 X New operating income/(loss) for department 8 in percentage

FINANCIAL ACCOUNTING
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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eBook Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of you raw materials from department A, which sells only to department B (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Sales Cost of goods sold Gross profit Utility expenses Wages expense Costs allocated from corporate Total expenses Dept. A Dept. B $21,000 $50,000 10,080 26,000 $10,920 $24,000 1,050 3,500 5,040 10,500 1,890 14,500 $7,980 $28,500 $2,940 -$4,500 Operating income/(loss) in dollars Operating income/(loss) in percentage 14% -9:% Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley's Manufacturing. Determine the operating income for department B, assuming department A "sold" department 8 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place. -2,850 X New operating income/(loss) for department B in dollars New operating income/(loss) for department B in percentage 5.7 X %
Transcribed Image Text:eBook Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of you raw materials from department A, which sells only to department B (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Sales Cost of goods sold Gross profit Utility expenses Wages expense Costs allocated from corporate Total expenses Dept. A Dept. B $21,000 $50,000 10,080 26,000 $10,920 $24,000 1,050 3,500 5,040 10,500 1,890 14,500 $7,980 $28,500 $2,940 -$4,500 Operating income/(loss) in dollars Operating income/(loss) in percentage 14% -9:% Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley's Manufacturing. Determine the operating income for department B, assuming department A "sold" department 8 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place. -2,850 X New operating income/(loss) for department B in dollars New operating income/(loss) for department B in percentage 5.7 X %
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