Cost Accounting, Student Value Edition (15th Edition)
Cost Accounting, Student Value Edition (15th Edition)
15th Edition
ISBN: 9780133428858
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 22, Problem 22.29P

1.

To determine

The C’s operating income from harvesting 420,000 pounds during June 2014 and processing them into juice.

2.

To determine

The bonus earned by each division manager in June 2014 by the transfer pricing methods: (a) 150% of the full cost and (b) Market price.

3.

To determine

To explain: The transfer pricing method preferred by each division manager and the way in which these conflicts which arise on the issue of transfer pricing can be resolved.

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Grunewald Industries sells on terms of 3/10, net 40. Gross sales last year were $4,161,000 and accounts receivable averaged $370,500. Half of Grunewald's customers paid on the 10th day and took discounts. What are the nominal and effective costs of trade credit to Grunewald's non-discount customers? (Hint:Calculate daily sales based on a 365-day year, calculate the average receivables for discount customers, and then find the DSO for the non-discount customers.) Do not round intermediate calculations. Round your answers to two decimal places. Effective cost of trade credit =
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