Oriole Corporation makes backpacks, with a specialty line for baseball players. This backpack has a spot for everything-helmet, spikes, glove, and bats-and it comes with a hook at the top that makes it easy to hang from a chain link fence in the dugout. The backpack division buys the hooks from-you guessed it-the hook division, which has enough capacity to meet both internal and external demand. At present, the hook and backpack divisions have agreed on a transfer price of $0.75 per hook. Current volumes, costs, and prices are listed below for each division for one month. The costs for the backpack division reflect all unit backpack costs, except for the hook. Variable cost per unit Absorption cost per unit Market price per unit Quantity produced Quantity sold externally Quantity sold internally (a) Hook Division Gross margin $ $0.50 $0.75 $0.90 1,600 700 900 Backpack Division $18.00 $21.00 $44.00 Hook division According to the information given, how much gross margin would each division report for one month? How much total gross margin would the company report (before eliminating intracompany transactions)? $ 900 LA 900 N/A Backpack division LA Total

Oriole Corporation makes backpacks, with a specialty line for baseball players. This backpack has a spot for everything-helmet, spikes, glove, and bats-and it comes with a hook at the top that makes it easy to hang from a chain link fence in the dugout. The backpack division buys the hooks from-you guessed it-the hook division, which has enough capacity to meet both internal and external demand. At present, the hook and backpack divisions have agreed on a transfer price of $0.75 per hook. Current volumes, costs, and prices are listed below for each division for one month. The costs for the backpack division reflect all unit backpack costs, except for the hook. Variable cost per unit Absorption cost per unit Market price per unit Quantity produced Quantity sold externally Quantity sold internally (a) Hook Division Gross margin $ $0.50 $0.75 $0.90 1,600 700 900 Backpack Division $18.00 $21.00 $44.00 Hook division According to the information given, how much gross margin would each division report for one month? How much total gross margin would the company report (before eliminating intracompany transactions)? $ 900 LA 900 N/A Backpack division LA Total

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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