Hamlet Industries is organized into two divisions, Fabrication and Finishing. Both divisions are considered to be profit centers, and thetwo division managers are evaluated in large part on divisional income. The company makes a single product. It is manufactured inFabrication and then packaged and sold in Distribution. There is no intermediate market for the product.The monthly income statements, in thousands of dollars, for the two divisions follow. Production and sales amounted to 34,800 units.RevenuesVariable costsContribution marginFixed costsDivisional profitAssume there is no special order pending.Required:a. What transfer price would you recommend for Hamlet Industries?b. Using your recommended transfer price, what will be the income of the two divisions, assuming monthly production and sales of34,800 units?to searchc. The manager of the Fabrication Division complains about the transfer price, saying that division profits are unfairly low. The twodivision managers meet and negotiate a transfer price of $148. What will be the income of the two divisions, assuming monthlyproduction and sales of 34,800 units.4Complete this question by entering your answers in the tabs below.RRequired A Required B Required CWhat transfer price would you recommend for Hamlet Industries?F%Fabrication($000)$5,2204,176$1,044800$2445TGB6Distribution($000)$8,7006,438$2,2621,462$ 800HN&7tyl8< PrevMLOPaK5 of 69O WF11)OLNext >888F12PHome{[End-1157°F Mostly cloudyInsert]DeBas

Contribution Margin - A gross or per-unit basis might be used to express the contribution margin. It…

Hamlet Industries is organized into two divisions, Fabrication and Finishing. Both divisions are considered to be profit centers, and the two division managers are evaluated in large part on divisional income. The company makes a single product. It is manufactured in Fabrication and then packaged and sold in Distribution. There is no intermediate market for the product. The monthly income statements, in thousands of dollars, for the two divisions follow. Production and sales amounted to 34,800 units. Fabrication ($000) $5,220 4,176 $1,044 800 $244 Revenues Variable costs Contribution margin Fixed costs Divisional profit Assume there is no special order pending. Required: Distribution ($000) $8,700 6,438 $2,262 1,462 $800

Hamlet Industries is organized into two divisions, Fabrication and Finishing. Both divisions are considered to be profit centers, and the two division managers are evaluated in large part on divisional income. The company makes a single product. It is manufactured in Fabrication and then packaged and sold in Distribution. There is no intermediate market for the product. The monthly income statements, in thousands of dollars, for the two divisions follow. Production and sales amounted to 34,800 units. Fabrication ($000) $5,220 4,176 $1,044 800 $244 Revenues Variable costs Contribution margin Fixed costs Divisional profit Assume there is no special order pending. Required: Distribution ($000) $8,700 6,438 $2,262 1,462 $800

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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