6 10 Dots ook Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company produced glass bottle and packed in cases of 24 bottles cach. Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company's container plant, which is a part of Container Division, Mixing Division uses all of the container plant's production. Each division (Mixing and Contained in considered a separate profit center and evaluated as such. As the new corporate controle you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division At your request Containst Divisions general manager asked other bottle manufacturers to quote a price for the number and stres demanded by Mixing Division. These competitive prices follow Price per Volum Tuta 520,000 Valent X4, 36. $9.40 1,000,000 7.69.00 1,560,000 10,296,000 References 2.40 6,60 "An equivalent case represents 24 bottles Container Division's cost analysis indicates that it can produce bottles at these costs. Volume 520.000 equivalent cases 1,040,000 1,568,600 Total Cost $3,624,000 0.320,000 9.012,000 Cast per ca $6.97 6.08 5.79 These costs include fixed costs of $920,000 and variable costs of $5 20 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mong Division. This interestis heightened because a significant portion of a division manager's income is an incentive bonus based on profit center results. Mixing Division has the following costs in addition to the bottle costs. Volume 520,000 equivalent ca 1.040,000 1,560,000 Total cost $1,920,000 2,720.000 3.520.000 Cost per Case S. 2.62 2.26 The corporate marketing group has fumished the following price demand relationship for the finished product Sales Volume 520,000 equivalent cases 1,040,000 1,560,000 Total Sale | A W $11.024,000 19,168,000 25,272,000 Soles Price per Case 321.20 19.20 16.20 Required: a. Amazon Beverages has used market price-based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.56 million cases. Calculate operating profits for Container Division, Mixing Division, Amazon Beverages b-1. Calculate operating profits for Container, Mixing and Amazon Beverages for volumes of 520,000 1,040,000 and 1560,000 cases b-2. Which volume of production is the most profitable for Container, Mixing and Amaron Beverages? Complete this question by entering your answers in the tabs below. OK ences Req A Req B1 Reg B2 Amazon Beverages has used market price-based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.56 million cases. Calculate operating profits for Container Division, Mixing Division, Amazon Beverages. (Enter your answers in thousands of dollars.) Profits for Container Division Profits for Mixing Division Profits for Amazon Beverages RA Req B1 > BOOK Complete this question by entering your answers in the tabs below. Paint erences ReqA Red B1 Reg B2 Calculate operating profits for Container, Mixing and Amazon Beverages for volumes of 520,000,1,040,000 and 1.560,000 cases. (Enter your answers in thousands of dollars.) 520,000 cases 1,040,000 Cases 1,500,000 cases Container profit Mixing profit Amazon Beverages profit