Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year,

image text in transcribed
image text in transcribed
Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: $ $ 186 126 Selling price per circuit board Variable cost per circuit board Number of circuit boards Produced during the year Sold to outside customers Sold to Division 3 20.700 15,500 5,200 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic instrument manufactured by that division (one board per Instrument). Division B incurred $300 in additional variable cost per Instrument and then sold the instruments for $660 each Required: 1. Calculate the net operating incomes earned by Division A. Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,700 clrcuit boards. Next year , Division B wants to purchase 6,200 circuit boards from Division A rather than 5,200. (Circuit boards of this type are not available from outside sources) From the standpoint of the company as a whole, should Division A sell the 1000 additional circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the net operating Incomes eamed by Division A. Division B, and the company as a whole Division A Division B Total Company Sales Expenses Added by the division Mama Homework Saved Help Save instrument and then sold the instruments for sobu each Required: 1. Calculate the net operating Incomes earned by Division A. Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,700 circuit boards. Next year, Division B wants to purchase 6,200 circuit boards from Division A rather than 5,200. (Circuit boards of this type are not avallable from outside sources) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? 3:20 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 1 Division A Division Total Company Sales Expenses Added by the division Transfer price paid Total expenses Net operating income onces S 05 0 $ g Required 2 >

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

Working Papers Volume 1 To Accompany Weygandt Financial And Managerial Accounting

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

1st Edition

1118233468, 978-1118233467

More Books

Students also viewed these Accounting questions