12. The lumber division of Sheffield corp. produces… The Lumber Division of Sheffield Corp. produces and sells lumber that can be sold to outside customers or within the company to theConstruction Division. The following data have been gathered for the coming period:Lumber Division:CapacityPrice per board footVariable production cost per bd. ft.Variable selling cost per bd. ft.Construction Division:Board feet neededOutside price paid per bd. ft.280000 board feetO Decrease by $30000O Decrease by $84000Increase by $156000O Increase by $33000$3.50$1.25$0.5060000$4.00If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs.If the Lumber Division has sufficient excess capacity to fulfill the Construction Division's needs, what will be the effect on thecompany's overall contribution margin?

Introduction:- Transfer pricing measures to the prices of goods and services that are exchanged…

If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs. If the Lumber Division has sufficient excess capacity to fulfill the Construction Division's needs, what will be the effect on th company's overall contribution margin? O Decrease by $30000 O Decrease by $84000 Increase by $156000

If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs. If the Lumber Division has sufficient excess capacity to fulfill the Construction Division's needs, what will be the effect on th company's overall contribution margin? O Decrease by $30000 O Decrease by $84000 Increase by $156000

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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Question

12. The lumber division of Sheffield corp. produces…

The Lumber Division of Sheffield Corp. produces and sells lumber that can be sold to outside customers or within the company to the
Construction Division. The following data have been gathered for the coming period:
Lumber Division:
Capacity
Price per board foot
Variable production cost per bd. ft.
Variable selling cost per bd. ft.
Construction Division:
Board feet needed
Outside price paid per bd. ft.
280000 board feet
O Decrease by $30000
O Decrease by $84000
Increase by $156000
O Increase by $33000
$3.50
$1.25
$0.50
60000
$4.00
If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs.
If the Lumber Division has sufficient excess capacity to fulfill the Construction Division's needs, what will be the effect on the
company's overall contribution margin?

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