cory for future sale. Financing Division takes loan applications, packages loans into pools, and sells them in the finan services the loans. Both divisions meet the requirements for segment disclosures under accounting rules. Division had $28 million in sales last year. Costs, other than those charged by Financing Division, totaled $26 millio on earned revenues of $4.5 million from servicing loans and incurred outside costs of $5.0 million. In addition, Finan tions $900,000 for loan-related fees. Sales' manager complained to corporate that Financing was charging 150 per ercial rate for loan-related fees and that Sales would be better off sending its buyers to an outside lender. cing's manager replied that although commercial rates could be lower, servicing these loans is more difficult, thereb gher fees. red:

cory for future sale. Financing Division takes loan applications, packages loans into pools, and sells them in the finan services the loans. Both divisions meet the requirements for segment disclosures under accounting rules. Division had $28 million in sales last year. Costs, other than those charged by Financing Division, totaled $26 millio on earned revenues of $4.5 million from servicing loans and incurred outside costs of $5.0 million. In addition, Finan tions $900,000 for loan-related fees. Sales' manager complained to corporate that Financing was charging 150 per ercial rate for loan-related fees and that Sales would be better off sending its buyers to an outside lender. cing's manager replied that although commercial rates could be lower, servicing these loans is more difficult, thereb gher fees. red:

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 2CE: Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each...

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