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The Cycle Division of Sarasota Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price Variable cost of goods sold Body frame Other variable costs Contribution margin $324 (a) 972 $2,376 Presently, the Cycle Division buys its body frames from an outside supplier. However Sarasota has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $378 per frame. The variable cost for FrameBody is $286. The Cycle Division is willing to pay $294 to purchase the frames from FrameBody.. 1,296 $1,080 (3) Effect on the income of Sarasota Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,080 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (1) Effect on the income of the Cycle Division $ (2) Effect on the income of FrameBody

The Cycle Division of Sarasota Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price Variable cost of goods sold Body frame Other variable costs Contribution margin $324 (a) 972 $2,376 Presently, the Cycle Division buys its body frames from an outside supplier. However Sarasota has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $378 per frame. The variable cost for FrameBody is $286. The Cycle Division is willing to pay $294 to purchase the frames from FrameBody.. 1,296 $1,080 (3) Effect on the income of Sarasota Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,080 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (1) Effect on the income of the Cycle Division $ (2) Effect on the income of FrameBody

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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The Cycle Division of Sarasota Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price Variable cost of goods sold Body frame Other variable costs Contribution margin $324 (a) 972 $2,376 Presently, the Cycle Division buys its body frames from an outside supplier. However Sarasota has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $378 per frame. The variable cost for FrameBody is $286. The Cycle Division is willing to pay $294 to purchase the frames from FrameBody.. 1,296 $1,080 (3) Effect on the income of Sarasota Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,080 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (1) Effect on the income of the Cycle Division $ (2) Effect on the income of FrameBody
Transcribed Image Text:The Cycle Division of Sarasota Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price Variable cost of goods sold Body frame Other variable costs Contribution margin $324 (a) 972 $2,376 Presently, the Cycle Division buys its body frames from an outside supplier. However Sarasota has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $378 per frame. The variable cost for FrameBody is $286. The Cycle Division is willing to pay $294 to purchase the frames from FrameBody.. 1,296 $1,080 (3) Effect on the income of Sarasota Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,080 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (1) Effect on the income of the Cycle Division $ (2) Effect on the income of FrameBody
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