Required: 1. Assuming Mactan has no excess capacity and will lose outside sales if it supplies Mindoro: 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?
Required: 1. Assuming Mactan has no excess capacity and will lose outside sales if it supplies Mindoro: 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Help answer letters abc with solution pls
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
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
Required:
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.
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?
====
1. Assuming Mactan has no excess capacity and will lose outside sales if it supplies
Mindoro:
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