Hello, I need help with 2 problems in the spreadsheet provided below. The tabs are P8-2A, P8-4A.
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Hello, I need help with 2 problems in the spreadsheet provided below. The tabs are P8-2A, P8-4A.
P8-2A
Round all calculations to two decimal places |
(a) Compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 25% on this new component. |
(b) Assuming that the volume is 40,000 units, compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 25% on this new component. |
P8-4A
Determine whether the printing should be done internally or externally, and the appropriate transfer price, under each of thefollowing situations. |
(a) Assume that the printing operations is booked solid for the next 2 years, and it would have to cancel an obligation which an outside customer in order to meet the need of the internal division. |
(b) Assume that the printing operation has available capacity. |
c) the top management of Word Wizard believes that the printing operation should always do the printing for the company's authors. On a number of occasions, it has forced the printing operation to cancel jobs with outside customers in order to meet the needs of its own lines. Discuss the pros and cons of this approach. |
d)Calculate the change in contribution margin to each division, and to the company as a whole, if top management forces the printing operation to accept the $0.007 per page transfer when it has no available capacity.
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