Pharoah International Corporation has two divisions, beta and gamma. Beta produces an electronic component that sells for $75 per unit, with the following costs based on its capacity of 213,000 units: Direct materials $22 Direct labour 17 Variable overhead 4 Fixed overhead 12 Beta is operating at 74% of normal capacity and gamma is purchasing 14,500 units of the same component from an outside supplier for $69 per unit. (a) Calculate the benefit, if any, to beta in selling to gamma 14,500 units at the outside supplier's price. Benefit $ per unit

Pharoah International Corporation has two divisions, beta and gamma. Beta produces an electronic component that sells for $75 per unit, with the following costs based on its capacity of 213,000 units: Direct materials $22 Direct labour 17 Variable overhead 4 Fixed overhead 12 Beta is operating at 74% of normal capacity and gamma is purchasing 14,500 units of the same component from an outside supplier for $69 per unit. (a) Calculate the benefit, if any, to beta in selling to gamma 14,500 units at the outside supplier's price. Benefit $ per unit

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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