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Division A manufactures electronic circult boards. The boards can be sold either to Division of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board Variable cost per circuit board Number of circuit boards: Produced during the year Sold to outside customers Sold to Division B Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic Instrument manufactured by that division (one board per instrument). Division B incurred $280 In additional variable cost per Instrument and then sold the Instruments for $640 each. Required: 1. Calculate the net operating Incomes earned by Division A. Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 21,800 circult boards. Next year, Division B wants to purchase 8,200 circult boards from Division A rather than 7,200. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Required 1 Required 2 Complete this question by entering your answers in the tabs below. Sales Expenses: $ 184 $ 112 21,800 14,600 7,209 Calculate the net operating incomes earned by Division A. Division B, and the company as a whole. Division A Division B Total Company Added by the division Transfer price paid Total expenses Net operating income S 0 0 $ 0 S < Required 1 0 0 Required 2 >

Division A manufactures electronic circult boards. The boards can be sold either to Division of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board Variable cost per circuit board Number of circuit boards: Produced during the year Sold to outside customers Sold to Division B Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic Instrument manufactured by that division (one board per instrument). Division B incurred $280 In additional variable cost per Instrument and then sold the Instruments for $640 each. Required: 1. Calculate the net operating Incomes earned by Division A. Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 21,800 circult boards. Next year, Division B wants to purchase 8,200 circult boards from Division A rather than 7,200. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Required 1 Required 2 Complete this question by entering your answers in the tabs below. Sales Expenses: $ 184 $ 112 21,800 14,600 7,209 Calculate the net operating incomes earned by Division A. Division B, and the company as a whole. Division A Division B Total Company Added by the division Transfer price paid Total expenses Net operating income S 0 0 $ 0 S < Required 1 0 0 Required 2 >

FINANCIAL ACCOUNTING
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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Division A manufactures electronic circult boards. The boards can be sold elther to Division of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board Variable cost per circuit board Number of circuit boards: Produced during the year Sold to outside customers Sold to Division B Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic Instrument manufactured by that division (one board per instrument). Division B incurred $280 In additional variable cost per Instrument and then sold the Instruments for $640 each. Required: 1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 21,800 circuit boards. Next year, Division B wants to purchase 8,200 circuit boards from Division A rather than 7,200. (Circult boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Sales Expenses: $184 $ 112 21,800 14,600 7,200 Required 1 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. Division A Division B Total Company Added by the division Transfer price paid Total expenses Net operating income S 0 0 $ 0 0 $ < Required 1 0 0 Required 2 >
Transcribed Image Text:Division A manufactures electronic circult boards. The boards can be sold elther to Division of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board Variable cost per circuit board Number of circuit boards: Produced during the year Sold to outside customers Sold to Division B Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic Instrument manufactured by that division (one board per instrument). Division B incurred $280 In additional variable cost per Instrument and then sold the Instruments for $640 each. Required: 1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 21,800 circuit boards. Next year, Division B wants to purchase 8,200 circuit boards from Division A rather than 7,200. (Circult boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Sales Expenses: $184 $ 112 21,800 14,600 7,200 Required 1 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. Division A Division B Total Company Added by the division Transfer price paid Total expenses Net operating income S 0 0 $ 0 0 $ < Required 1 0 0 Required 2 >
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