Blue Corporation makes backpacks, with a specialty line for baseball players. This backpack has a spot for everything-helmet, spikes. glove, and bats-and it comes with a hook at the top that makes it easy to hang from a chain link fence in the dugout. The backpack division buys the hooks from-you guessed it-the hook division, which has enough capacity to meet both internal and external demand. At present, the hook and backpack divisions have agreed on a transfer price of $0.75 per hook. Current volumes, costs, and prices are listed below for each division for one month. The costs for the backpack division reflect all unit backpack costs, except for the hook. Variable cost per unit Absorption cost per unit Market price per unit Quantity produced Quantity sold externally Quantity sold internally (a) Hook Division x Your answer is incorrect. Gross margin $0.50 $0.75 $0.90 2,100 1,300 800 Hook division Backpack Division According to the information given, how much gross margin would each division report for one month? How much total gross margin would the company report (before eliminating intracompany transactional? 520 $18.00 $21.00 $4800 BOD 800 Backpack division 20000 Total 20520
Blue Corporation makes backpacks, with a specialty line for baseball players. This backpack has a spot for everything-helmet, spikes. glove, and bats-and it comes with a hook at the top that makes it easy to hang from a chain link fence in the dugout. The backpack division buys the hooks from-you guessed it-the hook division, which has enough capacity to meet both internal and external demand. At present, the hook and backpack divisions have agreed on a transfer price of $0.75 per hook. Current volumes, costs, and prices are listed below for each division for one month. The costs for the backpack division reflect all unit backpack costs, except for the hook. Variable cost per unit Absorption cost per unit Market price per unit Quantity produced Quantity sold externally Quantity sold internally (a) Hook Division x Your answer is incorrect. Gross margin $0.50 $0.75 $0.90 2,100 1,300 800 Hook division Backpack Division According to the information given, how much gross margin would each division report for one month? How much total gross margin would the company report (before eliminating intracompany transactional? 520 $18.00 $21.00 $4800 BOD 800 Backpack division 20000 Total 20520
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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