E. Seprod pls is a manufacturing company where one product Detergent is produced with two major product divisions. Division X and Division Y. The Detergent is produced in Division X and then transferred to Division Y and also sells externally. AXE Ltd approached Division Y with an offer to supply it with 2500 boxes of Detergent at $25 each. The following detail are available for Division X: %24 Sales revenue Sales revenue to Division Y @$40 per box 400,000.00 External sales @$45 per box 270, 000.00 Less: Variable costs @$22 per box (352, 000.00) Fixed Costs (100, 000.00) 218,000.00 If Division Y decides to buy from AXE Ltd, assuming external sales of Division X cannot be increased, what is the impact of the decision on profits Division X and Seprod plc as a whole?

E. Seprod pls is a manufacturing company where one product Detergent is produced with two major product divisions. Division X and Division Y. The Detergent is produced in Division X and then transferred to Division Y and also sells externally. AXE Ltd approached Division Y with an offer to supply it with 2500 boxes of Detergent at $25 each. The following detail are available for Division X: %24 Sales revenue Sales revenue to Division Y @$40 per box 400,000.00 External sales @$45 per box 270, 000.00 Less: Variable costs @$22 per box (352, 000.00) Fixed Costs (100, 000.00) 218,000.00 If Division Y decides to buy from AXE Ltd, assuming external sales of Division X cannot be increased, what is the impact of the decision on profits Division X and Seprod plc as a whole?

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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