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 underno outside sales).The income statement for Marley's Manufacturing is shown below:Marley's ManufacturingIncome StatementMonth Ending August 31, 2018SalesCost of goods soldGross profitUtility expensesWages expenseCosts allocated from corporateTotal expensesDept. A$23,00010,810$12,1901,3805,9802,530$9,890$2,300Dept. B$51,00027,030$23,9703,06010,20015,300$28,560-$4,590Operating income/(loss) in dollarsOperating income/(loss) in percentage10 %-9%Assume the market price for the items your department purchase is 15% below what you are beingDetermine the operating income for department B, assuming department A "sold" department B 1,place.New operating income/(loss) for department B in dollarsNew operating income/(loss) for department B in percentage%

Lets understand the basics. When transfer is made between the two departments of the one entity then…

Answered: Assume you are the department B manager…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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
%

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