Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribed

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Principles

Authors: Howard F. Stettler

3rd Edition

0130521183, 9780130521187

More Books

Students also viewed these Accounting questions