Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
Division A manufactures electronic circuit boards. The boards can be sold either to Division of the same company or to outside customers. Last year, the following activity occurred in Division A: $ $ 176 122 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 21,200 15,000 6,200 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division 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 $600 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 21,200 circuit boards, Next year, Division B wants to purchase 7,200 circuit boards from Division A rather than 6,200. (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 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 B Total Company Sales Expenses: Added by the division Transfer price paid Total expenses Net operating income 0 0 0 $ 0 $ 0 $ 0 Begin Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume Division A's manufacturing capacity is 21,200 circuit boards. Next year, Division B wants to purchase 7,200 circuit boards from Division A rather than 6,200. (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 additional 1,000 circuit boards to Division B or continue to sell them to outside customers? Show less Continue to sell the additional 1.000 circuit boards to outside customers. Osell the 1,000 additional circuit boards to Division B.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Intermediate Accounting

Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,

10th Canadian Edition, Volume 1

978-1118735329, 9781118726327, 1118735323, 1118726324, 978-0176509736

Students also viewed these Accounting questions