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Mindoro Division of Calapan Industries manufactures furniture. Data on a sofa the division makes follows: Selling price per unit Variable cost per unit: Fabric Other Variable Cost Contribution Margin P175 400 P 900 P 575 P325 =====

Mindoro Division of Calapan Industries manufactures furniture. Data on a sofa the division makes follows: Selling price per unit Variable cost per unit: Fabric Other Variable Cost Contribution Margin P175 400 P 900 P 575 P325 =====

FINANCIAL ACCOUNTING
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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help me Answer A, B, C with solution pls, thanks.

Mindoro Division of Calapan Industries manufactures furniture. Data on a sofa the division makes follows: Selling price per unit Variable cost per unit: Fabric P175 Other Variable Cost 400 Contribution Margin P 900 P 575 P325 Mindoro buys the fabric from an outside supplier. The manager of Mindoro learns that Mactan Division of Calapan Industries makes a fabric that meets her requirements. Mactan sells the fabric to outside customers for P200. Variable cost to Mactan is P125. Mindoro's manager offers to buy the fabric at P150. Required: 1. Assuming Mactan Division has plenty of capacity to serve its outside customers and meet Mindoro's needs. If Mindoro buys 2,000 units from Mactan at P150. a. What would happen to the income of Mactan Division? b. What would happen to the income of Mindoro Division? c. What would happen to the income of Calapan Industries?
Transcribed Image Text:Mindoro Division of Calapan Industries manufactures furniture. Data on a sofa the division makes follows: Selling price per unit Variable cost per unit: Fabric P175 Other Variable Cost 400 Contribution Margin P 900 P 575 P325 Mindoro buys the fabric from an outside supplier. The manager of Mindoro learns that Mactan Division of Calapan Industries makes a fabric that meets her requirements. Mactan sells the fabric to outside customers for P200. Variable cost to Mactan is P125. Mindoro's manager offers to buy the fabric at P150. Required: 1. Assuming Mactan Division has plenty of capacity to serve its outside customers and meet Mindoro's needs. If Mindoro buys 2,000 units from Mactan at P150. a. What would happen to the income of Mactan Division? b. What would happen to the income of Mindoro Division? c. What would happen to the income of Calapan Industries?
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