COST MANAGEMENT LOOSELEAF CUSTOM
8th Edition
ISBN: 9781307659177
Author: BLOCHER
Publisher: MCG/CREATE
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Chapter 19, Problem 31E
1.
To determine
Indicate the role of transfer price.
2.
To determine
Identify the appropriate transfer price using general rules.
3.
To determine
Indicate the effect of excess capacity of fabrication division on transfer price.
4.
To determine
Indicate whether there is any down-siders of using general transfer pricing rule to compute the transfer pricing.
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Chapter 19 Homework
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Exercise 19-20 (Algo) Contribution margin ratio by sales territory LO A1
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Check my work
Big Bikes manufactures and sells mountain bikes in two sales territories, West Coast and East Coast. Information for the year
follows. The company sold 550 bikes in each territory.
Per unit
Sales price
Variable cost of goods sold
West Coast
$ 1,500
East Coast
$ 1,440
830
70
830
Variable selling and administrative expenses
160
Ask
a. Compute contribution margin (in dollars) for each sales territory.
b. Compute contribution margin ratio for each sales territory. Which sales territory has the better contribution margin ratio?
Print
Complete this question by entering your answers in the tabs below.
References
Required A Required B
Compute contribution margin (in dollars) for each sales territory.
Sales
Variable expenses
Variable cost of goods sold
Variable selling and administrative expenses
Contribution margin
West Coast
East Coast…
Chapter 19 Homework
15
0.87
points
eBook
Saved
Exercise 19-20 (Algo) Contribution margin ratio by sales territory LO A1
Help Save & Exit
Submit
Check my work
Big Bikes manufactures and sells mountain bikes in two sales territories, West Coast and East Coast. Information for the year
follows. The company sold 550 bikes in each territory.
Per unit
Sales price
Variable cost of goods sold
West Coast
$ 1,500
East Coast
$ 1,440
830
70
830
Variable selling and administrative expenses
160
Ask
a. Compute contribution margin (in dollars) for each sales territory.
b. Compute contribution margin ratio for each sales territory. Which sales territory has the better contribution margin ratio?
Print
Complete this question by entering your answers in the tabs below.
References
Required A Required B
Compute contribution margin (in dollars) for each sales territory.
Sales
Variable expenses
Variable cost of goods sold
Variable selling and administrative expenses
Contribution margin
West Coast
East Coast…
Chapter 19 Solutions
COST MANAGEMENT LOOSELEAF CUSTOM
Ch. 19 - Prob. 1QCh. 19 - What is return on investment (ROI), and how is it...Ch. 19 - What are the measurement issues to consider when...Ch. 19 - What are the advantages and limitations of return...Ch. 19 - What are the components of return on investment...Ch. 19 - What are the advantages and limitations of...Ch. 19 - Prob. 7QCh. 19 - Prob. 8QCh. 19 - What is meant by the term arm’s length standard,...Ch. 19 - What does expropriation mean, and what is the role...
Ch. 19 - Smith Branded Apparel designs T-shirts for...Ch. 19 - Williams Manufacturing uses scrap metal to produce...Ch. 19 - Prob. 13BECh. 19 - Prob. 14BECh. 19 - Prob. 15BECh. 19 - Prob. 16BECh. 19 - Prob. 17BECh. 19 - Prob. 18BECh. 19 - Prob. 19BECh. 19 - Prob. 20BECh. 19 - Prob. 21ECh. 19 - Prob. 22ECh. 19 - Prob. 23ECh. 19 - Prob. 24ECh. 19 - Prob. 25ECh. 19 - Prob. 26ECh. 19 - Prob. 27ECh. 19 - Prob. 28ECh. 19 - Prob. 29ECh. 19 - Prob. 30ECh. 19 - Prob. 31ECh. 19 - Prob. 32ECh. 19 - Prob. 33ECh. 19 - Prob. 34ECh. 19 - Prob. 37PCh. 19 - Prob. 38PCh. 19 - Prob. 41PCh. 19 - Prob. 42PCh. 19 - Prob. 43PCh. 19 - Prob. 44PCh. 19 - Prob. 45PCh. 19 - Prob. 46PCh. 19 - Prob. 47PCh. 19 - Prob. 48PCh. 19 - Prob. 49PCh. 19 - Prob. 50PCh. 19 - Prob. 51PCh. 19 - Prob. 52PCh. 19 - Prob. 53PCh. 19 - Prob. 54P
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- ht = ences X On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,920 in assets to launch the business. On December 31, the company's records show the following items and amounts. Cash withdrawals by owner Consulting revenue Salaries expense Cash $ 8,450 Accounts receivable 16,950 Office supplies 4,080 Rent expense Land 46,020 Office equipment 18,860 Telephone expense Accounts payable 9,280 Owner investments 84,920 Miscellaneous expenses $ 2,930 16,950 4,420 7,900 860 680 Exercise 1-18 (Algo) Preparing an income statement LO P2 Using the above information prepare a December income statement for the business. ERNST CONSULTING Income Statement Revenues Rent expense Salaries expense Telephone expense Total revenues $ 4,420 7,900 860 $ SA Assets Cash 8,450 Accounts receivable 16,950 Office supplies 4,080 Land 46,020 Office equipment 18,860 navable 9,280 13,180 5 11 of 14 Next >arrow_forwardEquipment was acquired at the beginning of the year at a cost of $77,220. The equipment was depreciated using the straight-line method based upon an estimated useful life of 6 years and an estimated residual value of $7,560. P1 What was the depreciation expense for the first year? _______ P2 Assuming the equipment was sold at the end of the second year for $58,320, determine the gain or loss on sale of the equipment. $_______________ P3 Journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles. 1. ____ Debit / Credit 2.____ Debit / Credit 3.____ Debit / Credit 4.____ Debit / Creditarrow_forwardUse the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,920 in assets to launch the business. On December 31, the company's records show the following items and amounts. Cash Accounts receivable Office supplies Land Office equipment Accounts payable Owner investments $ 8,450 Cash withdrawals by owner 16,950 4,080 Rent expense Consulting revenue Salaries expense 18,860 Telephone expense Miscellaneous expenses 46,020 9,280 84,920 $ 2,930 16,950 4,420 7,900 860 680 Check my work Exercise 1-21 (Algo) Preparing a statement of cash flows LO P2 Also assume the following: a. The owner's initial investment consists of $38,900 cash and $46,020 in land. b. The company's $18,860 equipment purchase is paid in cash. c. Cash paid to employees is $2,700. The accounts payable balance of $9,280 consists of the $4,080 office supplies…arrow_forward
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