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). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation.Marley's ManufacturingIncome StatementMonth Ending August 31, 2018 Dept. ADept. BSales$23,000 $52,000 Cost of goods sold11,270 27,040 Gross profit$11,730 $24,960 Expenses: Utility expenses$1,380 $3,640 Wages expense5,980 9,880 Costs allocated from corporate2,300 14,560 Total expenses$9,660 $28,080 Operating income/(loss) in dollars$fill in the blank 1 $fill in the blank 2 Operating income/(loss) in percentagefill in the blank 3%fill in the blank 4%

Introduction:- The following formula used to calculate operating income/Loss percentage as follows:-…

Answered: Assume you are the department B manager…

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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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). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation.

Marley's Manufacturing Income Statement Month Ending August 31, 2018
	Dept. A	Dept. B
Sales	$23,000		$52,000
Cost of goods sold	11,270		27,040
Gross profit	$11,730		$24,960
Expenses:
Utility expenses	$1,380		$3,640
Wages expense	5,980		9,880
Costs allocated from corporate	2,300		14,560
Total expenses	$9,660		$28,080
Operating income/(loss) in dollars	$fill in the blank 1		$fill in the blank 2
Operating income/(loss) in percentage	fill in the blank 3	%	fill in the blank 4	%

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