Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 materials from department A, which sells only to department (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. B Sales $22,000 $51,000 Cost of goods sold 10,340 26,520 Gross profit $11,660 $24,480 Utility expenses 3,570 Wages expense 5,280 10,710 Costs allocated from corporate 1.990 14,790 Total expenses $8,580 $29,070 Operating income/loss) in dollars $3,080 $4,590 Operating income/(los) in percentage 14% 9 Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley's Manufacturing, 1,320 Determine the operating income for department B, assuming department A "sold" department B 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place. New operating income/(loss) for department B in dollars $ New operating income/(loss) for department in percentage Previous Nes
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started