Management of the Catering Company would like the Food Division to transfer 10800 cans of its final product to the Restaurant Division for $95. The Food Division sells the product to customers for $130 per unit. The Food Division's variable cost per unit is $80 and its fixed cost per unit is $15. The Food Division is currently operating at full capacity. What is the minimum transfer price the Food Division should accept? $15 O $80 O $95 O $130
Q: BBB Company has capacity to produce 150,000 units a year and sell it for $96 each. The costs of…
A: Given that: Number of units = 150,000 units Selling price per unit = $96 per unit
Q: 16.Cost to make a unit is $12, we sell the unit to customers for $20. What would the tranfer price…
A: Since multiple questions are posted, as per the guidelines only the first question will be answered.…
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A: Breakeven point is the number of boxes to be sold so that the company incurs no profit nor loss.…
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A: Formula: Minimum transfer price = Unit variable cost - Selling internally will save cost
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A: Fixed costs are not relevant for decision making. They are constant in total.
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A: Overheads are the indirect costs of making or producing the product which can not be directly…
Q: 1. Prepare the company's current contribution margin income statement. 2. Calculate the change in…
A: A contribution margin income statement is an income statement in which all variable expenses are…
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A: As per the general transfer pricing rule, in the case of sufficient capacity available, the minimum…
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A: Transfer pricing methodology is used for setting prices at which products can be transferred from…
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A: a. Total relevant cost = Material + Labor + overhead + Product level cost =6500+6400+4100+9600*1/3 =…
Q: XYZ Enterprises produces high quality blankets sold to hotels and resorts. Blankets must be well…
A: The special order should be considered of it provides additional income to the business.
Q: Answer the following question Required Dowling Computers makes 5,100 units of a circuit board, CB76,…
A: Given Unit require = 5,100 units Relevant Cost = Variable Cost + Avoidable Fixed Cost
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A: Transfer price is the one at which the goods from one division can be transferred to the other. It…
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A: The choice of whether or not to create a product in-house or to buy it from a third party is…
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A: Break-even sales refer to the level of sales at which a company's total revenue equals its total…
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A: Transfer price is the amount which is charged by another department for producing the goods and…
Q: Required: Assume that the Pump Division has enough Idle capacity to handle all of the Pool Products…
A: Transfer price is the price at which one division transfers goods to the other division of the same…
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A: Full cost of $7.10 is irrelevant cost because the production in excess capacity will only incur…
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A: Break even point :— It is the point of production where total cost is equal to total revenue. At…
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A: Current Net Income:Sales = 77,300 units × $103 per unit = $7,961,900Variable Costs = 77,300 units ×…
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A: Relevant costs are the costs which are relevant to the decision making process. In this question,…
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A: CVP analysis is considered a decision-making tool that helps management to make strategies and take…
Q: The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division.…
A: The transfer price is the price at which the units are transferred from one department to another in…
Q: Holiday Corporation has two divisions, Quail and Marlin. Quail produces a widget that Marlin could…
A: Introduction:- This question deals with the concept of transfer pricing, which is the pricing…
Q: ou have been provided with the following information for Division X of a decentralized company:…
A: The objective of this question is to determine the lowest price that Division X could accept from…
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A: Break even point is the point where both cost and revenue should be equal, it means there is no…
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A: If a company is faced with a special order and the selling price for the order is the same as the…
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A: Lets understand the basics.Transfer price means the price charged by one department from other…
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A: The relevant costs are the avoidable costs that can be ignored if the alternative is not chosen. The…
Q: The Slate Company manufactures and sells television sets. Its assembly division (AD) buys television…
A:
Q: a. Determine the minimum transfer price if the national division buys 5,000 widgets from the…
A: A company may calculate the minimum acceptable transfer price as equal to the variable costs or…
Q: Vista Company manufactures electronic equipment. It currently purchases the special switches used in…
A: Break-even point = Fixed Cost/Contribution per unit,At Indifferent point, totalcost of both machines…
Q: What is the minimum transfer price that will maximize corporate profits?
A: Transfer price: The price charged for the goods and services transferred among the divisions are…
Q: a) What is the break-even point for the manual process (in units)? b) What is the break-even point…
A: Break Even point is the point of sale value or sale units, where profit or loss of the Business…
Q: Southfield Division offers its product to outside markets for $134. It incurs variable costs of $59…
A: A special order is a one-time order that is received from not a regular customer. Special order…
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A: The phrase "reasonable net income goal" refers to the intended level of profit that a business seeks…
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A: Internal transfer means where one independent department is transferring the goods to another…
Q: The Can Division of Sheffield Corp. manufactures and sells recyclable containers externally for…
A: Transfer price is synonymous with transfer cost. It refers to the price at which related parties…
Q: The Heating Division of Oriole International produces a heating element that it sells to its…
A: Transfer price means the price charged by one department from other department of the same company…
Q: You are selling a new line of T-shirts on the boardwalk. The selling price will be $25 per shirt.…
A: Break even point in units = Fixed costs / contribution margin per unit Break even point in sales…
Q: A manager of Burns Sporting Goods Company is considering accepting an order from an overseas…
A: Variable cost is a cost that change with activity or production volume and are recorded in inventory…
Q: Management of the Crane Company would like the Food Division to transfer 11000 cans of its final…
A: The minimum transfer price is equivalent to the marginal cost of manufacturing one product. The…
Q: The Windshield division of Fast Car Co. makes windshields for use in Fast Car’s Assembly division.…
A: Transfer price: It can be defined as a price at which products and services are transferred between…
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- Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $5.50 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Annual fixed costs Variable cost per switch Machine A $632,400 1.78 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 235,000 switches per year and what is the total cost of that alternative? Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Machine B $ 860,100 0.80 Minimum number of switches For each machine, what is the minimum number of switches that…Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market $ 136 Variable costs per unit $ 118 Fixed costs per unit (based on capacity) $ 8 Capacity in units 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 5,000 speakers per year. It has received a quote of $133 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits. Required: Assume the Audio Division sells only 20,000 speakers per year to outside customers. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? What is the range of…Use the information for Desks Unlimited above with the following changes:1. The Computer Desk Division is able to sell at full capacity (15,000 units).2. If there is a transfer between the divisions, the Computer Desk Division will save $50 per unit in Variable Marketing and Shipping costs.Answer the following questions. Show your work and clearly label your answers. a. What is the appropriate Transfer Price range?b. If a transfer is made for $460 per desk, how much better of worse off is the firm?
- Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $5.20 per switch. Vista 's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Machine A Machine B Annual fixed costs $ 582, 450 $ 792, 100 Variable cost per switch 1.67 0.75 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 230,000 switches per year and what is the total cost of that alternative?Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow:Selling price per unit on the intermediate market $ 80Variable costs per unit $ 62Fixed costs per unit (based on capacity) $ 8Capacity in units 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 5,000 speakers per year. It has received a quote of $77 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits.Required: 1. Assume the Audio Division is selling 22,500 speakers per year to outside customers. A. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? B. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? C. What is the…Shelby Industries has a capacity to produce 45,00045,000 oak shelves per year and is currently selling 40,00040,000 shelves for $32$32 each. Martin Hardwoods has approached Shelby about buying 1,2001,200 shelves for a new project and is willing to pay $26$26 each. The shelves can be packaged in bulk; this saves Shelby $1.50$1.50 per shelf compared to the normal packaging cost. Shelves have a unit variable cost of $27$27 with fixed costs of $350,000$350,000. Because the shelves don’t require packaging, the unit variable costs for the special order will drop from $27$27 per shelf to $25.50$25.50 per shelf. Shelby has enough idle capacity to accept the contract. What is the minimum price per shelf that Shelby should accept for this special order?
- Southfield Division offers its product to outside markets for $133. It incurs variable costs of $58 per unit and fixed costs of $148,000 per month based on monthly production of 23,800 units. Northfield Division can acquire the product from an alternate supplier for $138 per unit or from Southwest Division for a transfer price of $133 plus $9 per unit in transportation costs. Required: a. What are the costs and benefits of the alternatives available to Southfield Division and Northfield Division with respect to the transfer of Southfield Division's product? Assume that Southfield Division can market all that it can produce. b. How would your answer change if Southfield Division had idle capacity sufficient to cover all of Northfield Division's needs? a. Net benefit b. Net benefit per unit per unitThe Windshield division of Jaguar Company makes windshields for use in its Assembly division. The Windshield division incurs variable costs of $208 per windshield and has capacity to make 670,000 windshields per year. The market price is $530 per windshield. The Windshield division incurs total fixed costs of $4,000,000 per year. If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between the Windshield and Assembly divisions? Transfer price per windshield will be at least but not more thanThe Dairy Division of Concord Corporation produces and sells milk to outside customers. The operation has the capacity to produce 200000 gallons of milk a year. Last year’s operating results were as follows: Sales (150000) gallons $675000 Variable costs 292500 Contribution margin 382500 Fixed costs 100000 Net Income $ 282500 Assume the Dairy Division is operating at capacity. If the Yogurt Division wants to purchase 40000 gallons of milk from the Dairy Division, what is the minimum price that will allow the Dairy Division to maintain its current net income? $1.88 per gallon $4.50 per gallon $1.95 per gallon $2.55 per gallon
- manager of Dutch’s Sporting Goods Company is considering accepting an order from an overseas customer. This customer has requested an order for 20,000 dozen golf balls at a price of $15.00 per dozen. The variable cost to manufacture a dozen golf balls is $13.00 per dozen. The full cost is $17.00 per dozen. Dutch’s has a normal selling price of $23.00 per dozen. Dutch’s plant has just enough excess capacity on the second shift to make the overseas order. What are some considerations in accepting or rejecting this order?Southwest Division offers its product to outside markets for $30. It incurs variable costs of $11 per unit and fixed costs of $37,50040,000 per month based on monthly production of 4,000 units. Northeast Division can acquire the product from an alternate supplier for $31 per unit or from Southwest Division for a transfer price of $30 plus $2 per unit in transportation costs. a. What are the costs and benefits of the alternatives available to Southwest Division and Northeast Division with respect to the transfer of Southwest Division's product? b. How would you answer change if Southwest Division had idle capacity sufficient to cover all of Northeast Division's needs?You need 1,000 units of product Y per month. You currently make product Y in-house at a cost of $7/unit, which consists of $2/unit of fixed costs and $5/unit of variable costs. An outside supplier has offered to manufacture product Y for you at a wholesale price of $2 per unit. If you outsource the production of Y to the outside supplier in the short term, your profit will: increase by $3,000 decrease by $2,000 remain the same decrease by $3,000 increase by $2,000