Question
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
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 B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation. Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. B Sales $21,000 $52,000 Cost of goods sold 9,870 26,520 Gross profit $11,130 $25,480 Expenses: Utility expenses $1,260 $3,120 Wages expense 5,250 10,920 Costs allocated from corporate 2,310 15,600 Total expenses $8,820 $29,640 Operating income/(loss) in dollars Operating income/(loss) in percentage %
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