MARLEY'S MANUFACTURINGIncome StatementMonth Ending August 31, 2018Dept ADept BSales$22,000$51,000Cost of goods soldGross profitUtility expenses10,560$11,44026,520$24,4801,0003,200Wages expenseCosts allocated from corporateTotal expenses5,50010,2002,200$ 8,70015,000$28,400Operating income/(loss) $?Operating income/(loss) %? EA5. LO 9.4 Assume you are the department B manager for Marley's Manufacturing.Marley's operates under a cost-based transfer structure. Assume you receive the majority ofyour raw materials from department A, which sells only to department B (they have nooutside sales). After calculating the operating income in dollars and operating income inpercentage, analyze the following financial information to determine costs that may needfurther investigation. (Hint: It may be helpful to perform a vertical analysis.)

Sales revenue: It is the revenue earned by a business on selling the goods or providing services to…

MARLEY'S MANUFACTURING Income Statement Month Ending August 31, 2018 Dept A Dept B Sales $22,000 $51,000 Cost of goods sold Gross profit Utility expenses Wages expense Costs allocated from corporate Total expenses 10,560 $11,440 26,520 $24,480 3,200 1,000 5,500 10,200 2,200 $ 8,700 15,000 $28,400 Operating income/(loss) $ ? Operating income/(loss) % ? ?

MARLEY'S MANUFACTURING Income Statement Month Ending August 31, 2018 Dept A Dept B Sales $22,000 $51,000 Cost of goods sold Gross profit Utility expenses Wages expense Costs allocated from corporate Total expenses 10,560 $11,440 26,520 $24,480 3,200 1,000 5,500 10,200 2,200 $ 8,700 15,000 $28,400 Operating income/(loss) $ ? Operating income/(loss) % ? ?

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

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MARLEY'S MANUFACTURING
Income Statement
Month Ending August 31, 2018
Dept A
Dept B
Sales
$22,000
$51,000
Cost of goods sold
Gross profit
Utility expenses
10,560
$11,440
26,520
$24,480
1,000
3,200
Wages expense
Costs allocated from corporate
Total expenses
5,500
10,200
2,200
$ 8,700
15,000
$28,400
Operating income/(loss) $
?
Operating income/(loss) %
?

EA5. LO 9.4 Assume you are the department B manager for Marley's Manufacturing.
Marley's operates under a cost-based transfer structure. Assume you receive the majority of
your raw materials from department A, which sells only to department B (they have no
outside sales). After calculating the operating income in dollars and operating income in
percentage, analyze the following financial information to determine costs that may need
further investigation. (Hint: It may be helpful to perform a vertical analysis.)

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