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Assume you are the department B manager for Marley's Manufacturing, Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw

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Assume you are the department B manager for Marley's Manufacturing, Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the foliowing financial information to determine costs that may need further investigation Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. Sales 122,000 553,000 Cost of goods sold 10,560 48% 26,520 52% Gross proht $11,440 $24.480 Expenses uity expenses $1,000 5 $3,200 6% Wages expense 5,500 25% 10,200 201 Costs allocated from corporate 2,200 10% 15.000 294 Total expenses $1,700 $28,400 Operating income/(loss) in dollars $2,740 (53.920) Operating Income/c10ss) in percentage 129 Based on your research of the market, you have determined the market price for the items your department purchase is 15% below what you are being charged by department of Marley's Manufacturing. How would you view this manager? What steps could you take to solve this discrepancy? What alternatives would you consider, assuming you had control over purchasing decisions . You could propose working with department A to review the production process b. You could propose working with department A to review the transfer price You might consider purchasing the items from an outside supplier d. All of the above answers are correct

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