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 your 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 Sales $23,000 $51,000 Cost of goods sold 11,040 27,030 Gross profit $11,960 $23,970 Utility expenses 1,150 3,060 Wages expense 5,750 10,710 Costs allocated from corporate 2,070 14,790 Total expenses $8,970 $28,560 Operating income/(loss) in dollars $2,990 -$4,590 Operating income/(loss) in percentage 13 % -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 B 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 New operating income/(loss) for department B in percentage %

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 your 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 Sales $23,000 $51,000 Cost of goods sold 11,040 27,030 Gross profit $11,960 $23,970 Utility expenses 1,150 3,060 Wages expense 5,750 10,710 Costs allocated from corporate 2,070 14,790 Total expenses $8,970 $28,560 Operating income/(loss) in dollars $2,990 -$4,590 Operating income/(loss) in percentage 13 % -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 B 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 New operating income/(loss) for department B in percentage %

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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