Assume you are the department B manager for Marleys 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) 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 unit during the month and department A reduced the selling price to the market price. Round your percentage answer to one decimal.
Assume you are the department B manager for Marleys 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) 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 unit during the month and department A reduced the selling price to the market price. Round your percentage answer to one decimal.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter25: Departmental Accounting
Section: Chapter Questions
Problem 9SPA: INCOME STATEMENT WITH DEPART MENTAL DIRECT OPERATING MARGIN AND TOTAL OPERATING INCOME Durwood...
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Assume you are the department B manager for Marleys 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)
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 unit during the month and department A reduced the selling price to the market price. Round your percentage answer to one decimal.
![Assume you are the department B manager for Marley's Manufacturing. Marley's operates under
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
$23,000
10,810
$12,190
1,380
5,980
2,530
$9,890
$2,300
Dept. B
$51,000
27,030
$23,970
3,060
10,200
15,300
$28,560
-$4,590
Operating income/(loss) in dollars
Operating income/(loss) in percentage
10 %
-9%
Assume the market price for the items your department purchase is 15% below what you are being
Determine the operating income for department B, assuming department A "sold" department B 1,
place.
New operating income/(loss) for department B in dollars
New operating income/(loss) for department B in percentage
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa10265c9-c446-4f5e-88cf-d8226c0fdc6d%2Fe029a6cf-59c4-434e-88fb-1f723d86960a%2Fcjxrp0v_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Assume you are the department B manager for Marley's Manufacturing. Marley's operates under
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
$23,000
10,810
$12,190
1,380
5,980
2,530
$9,890
$2,300
Dept. B
$51,000
27,030
$23,970
3,060
10,200
15,300
$28,560
-$4,590
Operating income/(loss) in dollars
Operating income/(loss) in percentage
10 %
-9%
Assume the market price for the items your department purchase is 15% below what you are being
Determine the operating income for department B, assuming department A "sold" department B 1,
place.
New operating income/(loss) for department B in dollars
New operating income/(loss) for department B in percentage
%
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