Materials used by Square Yard Products Inc. inproducing Division 3's product are currentlypurchased from outside suppliers at a cost of $5 perunit. However, the same materials are available fromDivision 6.Division 6 has unused capacity and can produce thematerials needed by Division 3 at a variable cost of $3per unit. A transfer price of $3.20 per unit isestablished, and 40,000 unitsand 40,000 units of material aretransferred, with no reduction in Division 6's currentsales.How much would Division 3's income from operationsincrease?

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Answered: Materials used by Square Yard Products…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 17E: Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside...

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Materials used by the Instrument Division of Ziegler Inc. are currentlypurchased from outside suppliers at a cost of $1,350 per unit. However,the same materials are available from the Components Divison. TheComponents Division has unused capacity and can produce thematerials needed by the Instrument Division at a variable cost of $900per unit. a. If a transfer price of $1,000 per unit is established and 75,000units of materials are transferred, with no reduction in theComponents Division's current sales, how much would ZieglerInc.'s total operating income increase?b. How much would the Instrument Division's operating incomeincrease?c. How much would the components Division's operating incomeincrease?
Use this information for Jefferson Company to answer the question that follow.Materials used by Jefferson Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10.00 per unit. However, the same materials are available with Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 25,000 units of material are transferred, with no reduction in Division A's current sales.How much will Jefferson's total income from operations increase? a.$100,000 b.$37,500 c.$150,000 d.$62,500
Materials used by Best Bread Company in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit.However, the same materials are available from Division B.Division B has unused capacity and can produce the materials needed by Division A at a variable cost of $20 per unit. a If a transfer price of $25 per unit is established and 60,000 units of material are transferred, with no reductions in Division B's current sales, how much would Best Bread Company's total income from operations increase? b Assuming transfer price of $25 per unit is established and 60,000 units of material are transferred, with no reductions in Division B's current sales, how much would the income from operations of Division A increase? c Assuming transfer price of $25 per unit is established and 60,000 units of material are transferred, with no reductions in Division B's current sales, how much would the income from operations of Division B increase? d If the…
Materials used by Best Bread Company in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit. However, the same materials are available from Division B. Division B has unused capacity and can produce the materials needed by Division A at a variable cost of $20 per unit. 1. If a transfer price of $25 per unit is established and 60,000 units of material are transferred, with no reductions in Division B's current sales, how much would Best Bread Company's total income from operations increase? 2. Assuming transfer price of $25, how much would the income from operations of Division A increase? 3. Assuming transfer price of $25, how much would the income from operations of Division B increase? 4. If the negotiated price approach is used, what would be the range of acceptable transfer prices?
Materials used by Ford Company in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit. However, the same materials are available from Division B. Division B has unused capacity and can produce the materials needed by Division A at a variable cost of $20 per unit. a. If a transfer price of $25 per unit is established and 60,000 units of material are transferred with no reductions in Division B's current sales, how much would Ford Company's total operating income increase?$fill in the blank 1 b. How much would the operating income of Division A increase?$fill in the blank 2 c. How much would the operating income of Division B increase?$fill in the blank 3 d. If the negotiated price approach is used, what would be the range of acceptable transfer prices? Round your answer to two decimal places.$fill in the blank 4 to $fill in the blank 5
Materials used by Ford Company in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit. However, the same materials are available from Division B. Division B has unused capacity and can produce the materials needed by Division A at a variable cost of $20 per unit. a. If a transfer price of $25 per unit is established and 60,000 units of material are transferred with no reductions in Division B's current sales, how much would Ford Company's total operating income increase? $ 600,000 b. How much would the operating income of Division A increase? $ 300,000 v c. How much would the operating income of Division B increase? $ 300,000 V d. If the negotiated price approach is used, what would be the range of acceptable transfer prices? Round your answer to two decimal places. x to X
Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. How much will Division 6's income from operations increase? Question 5 options: $8,000 $15,000 $80,000 $150,000
The materials used by the South Division of Eagle Company are currently purchased from outside suppliers at $30 per unit. These same materials are produced by Eagle’s North Division. Operating income assuming no transfers between divisions is $1,200,000 for the North Division and $1,360,000 for the South Division. The North Division has unused capacity and can produce the materials needed by the South Division at a variable cost of $15 per unit. The two divisions have recently negotiated a transfer price of $22 per unit for 30,000 units. Based on the agreed upon transfer price, with no reduction in the North Division’s current sales: the North Division’s operating income would increase _____; the South Division’s operating income would increase _____; and the Eagle Company’s operating income would increase _____. $210,000; $240,000; $450,000 $210,000; $450;000; $240,000 $240,000; $210,000; $450,000 $240,000; $450,000; $210,000 none of the above
Materials used by the Instrument Division of T_Kong Industries are currently purchased from outside suppliers at a cost of $175 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $122 per unit. a. If a transfer price of $148 per unit is established and 50,000 units of materials are transferred, with no reduction in the Components Division’s current sales, how much would T_Kong Industries’ total income from operations increase? b. How much would the Instrument Division's income from operations increase? c. How much would the Components Division's income from operations increase?
Part P40 is a part used in the production of dehumidifiers at Pollock Corporation. The following costs and data relate to the production of Part P40: Number of parts produced annually Fixed costs Variable costs Total cost to produce 25,000 $44,000 $68,000 $112,000 Pollock Corporation can purchase the part from an outside supplier for $4.55 per unit. If they purchase from the outside supplier, 50% of the fixed costs would be avoided. If the company buys the part, what is the most it can spend per unit so that operating income is equal to $97,000? (Round the final answer to the nearest cent.) A. $3.00 B. $3.88 OC. $2.12 D. $1.55
Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $332 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $276 per unit. A. If a transfer price of $302 per unit is established and 28,900 units of materials are transferred, with no reduction in the Components Division's current sales, how much would Ziegler Inc.’s total operating income increase? B. How much would the Instrument Division's operating income increase? C. How much would the Component Division's operating income increase?
Materials used by the Instrument Division of XPort Industries are currently purchased from outside suppliers at a cost of $220 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $165 per unit. If a transfer price of $190 per unit is established and 60,000 units of materials are transferred, with no reduction in the Components Division’s current sales, how much would XPort Industries’ total income from operations increase? How much would the Instrument Division’s income from operations increase? How much would the Components Division’s income from operations increase?

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