Holiday Corp. has two divisions, Quail and Marlin. Quail produces a widget that Marlun could use in its production. Quail's variable costs are $5.80 per widget while the full cost is $8.80. Widgets sell on the open market for $15.6 each. If Quail has excess capacity, what would be the minimum transfer price if Marlin is purchasing 190000 units on the open market? a) $5.8 b) $8.8 c) $15.6 d) $6.8

Holiday Corp. has two divisions, Quail and Marlin. Quail produces a widget that Marlun could use in its production. Quail's variable costs are $5.80 per widget while the full cost is $8.80. Widgets sell on the open market for $15.6 each. If Quail has excess capacity, what would be the minimum transfer price if Marlin is purchasing 190000 units on the open market? a) $5.8 b) $8.8 c) $15.6 d) $6.8

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $13. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the full-cost-based transfer price? Variable cost per unit $7.89 Fixed cost per unit 1.48 Division B sales price of Component X 14.5
Concord Music produces 59600 blank CDs on which to record music. The CDs have the following costs: Direct Materials $10000 Direct Labour 15700 Variable Overhead 3300 Fixed Overhead 6600 None of Concord’s fixed overhead costs can be reduced, but another product could be made that would increase the operating income by $4500 if the CDs were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the CDs, what is the maximum external price that Concord would be willing to accept to acquire the 59600 units externally? $31100 $40100 $35600 $33500
Grace Co. can further process Product B to produce Product C. Product B is currently selling for $24 per pound and costs $16 per pound to produce. Product C would sell for $39 per pound and would require an additional cost of $9 per pound to produce. What is the differential revenue of producing and selling Product C? a.$23 per pound b.$39 per pound c.$30 per pound d.$15 per pound
Required:(a) GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties and other special costs associated with this order would total $42 000. The only selling costs that would be associated with the order would be a shipping cost of $9.00 per unit. What would be the minimum acceptable unit price for GEM to consider this order? (hint: GEM would not accept the order if it would reduce the company’s profit) (b) The company has 200 units of Flicks on hand that were produced two months ago. Due to blemishes on the units, it will be impossible to sell these units at the normal price. If the company wishes to sell them through regular sales channels, what would be the relevant cost for setting the minimum price? Explain. (c) “All future costs are relevant in decision making.” Do you agree? Explain.
The Chimes Clock Company sells a particular clock for $40. The variable costs are $23 per clock and the breakeven point is 230 clocks. The company expects to sell 280 clocks this year. If the company actually sells 430 clocks, what effect would the sale of additional 150 clocks have on operating income? Explain your answer. The sale of an additional 150 clocks would operating income by the amount of The total effect would amount to
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $13. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the cost-based transfer price? Variable cost per unit $6.31 Fixed cost per unit 1.36 Division B sales price of Component X 14.5
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $12. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the cost-based transfer price? Variable cost per unit $7.48 • Fixed cost per unit 1.97 • Division B sales price of Component X 14.50
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $13. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the cost plus assuming 25% transfer price? • Variable cost per unit $6.38 Fixed cost per unit 1.13 • Division B sales price of Component X 14.50
Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $20.15 per pound and costs $15.25 per pound to produce. Product D would sell for $36.60 per pound and would require an additional cost of $9.05 per pound to produce. The differential cost of producing Product D is
Green Co. incurses cost of $15 per pound to produce Product X, which it sells for $26 per pound. The company can further process Product X to produce Product Y. Product Y would sell for $30 per pound and would require an additional cost of $10 per pound to be produced. The differential cost of producing Product Y is _____.
I need help with requirement 2 please.
Gibson Corporation’s balance sheet indicates that the company has $580,000 invested in operating assets. During the year, Gibson earned operating income of $67,280 on $1,160,000 of sales. Required Compute Gibson’s profit margin for the year. Compute Gibson’s turnover for the year. Compute Gibson’s return on investment for the year. Recompute Gibson’s ROI under each of the following independent assumptions:(1) Sales increase from $1,160,000 to $1,392,000, thereby resulting in an increase in operating income from $67,280 to $76,560.(2) Sales remain constant, but Gibson reduces expenses, resulting in an increase in operating income from $67,280 to $69,600.(3) Gibson is able to reduce its invested capital from $580,000 to $464,000 without affecting operating income.