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Division A manufactures electronic circuit boards. The boards can be sold elther to Division of the same company or to outside customers. Last year, the
Division A manufactures electronic circuit boards. The boards can be sold elther to Division of the same company or to outside customers. Last year, the following activity occurred in Division A $ 192 127 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 B 21,700 14.400 7.300 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 $260 In additional variable cost per Instrument and then sold the instruments for $680 each. Required: 1. Calculate the net operating Incomes earned by Division A. Division B, and the company as a whole. 2. Assume Division As manufacturing capacity is 21700 circuit boards. Next year, Division B wants to purchase 8,300 circuit boards from Division A rather than 7,300. (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 1,000 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 earned by Division A, Division B, and the company as a whole. Division A Division Total Company Sales Expenses: Added by the division Transfer price paid Total expenses Net operating income Required 2 >
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