Answered step by step
Verified Expert Solution
Question
1 Approved Answer
help! Check my work 7 Exercise 11-7 (Algo) Transfer Pricing from the Viewpoint of the Entire Company (LO11-3) How rences Division A manufactures electronic circuit
help!
Check my work 7 Exercise 11-7 (Algo) Transfer Pricing from the Viewpoint of the Entire Company (LO11-3) How rences Division A manufactures electronic circuit boards. The boards can be sold elther to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board $ 182 Variable cost per circuit board $ 119 Number of circuit boards: Produced during the year 20,600 Sold to outside customers 15,200 sold to Division B 5,400 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 the division (one board per instrument). Division B incurred $210 in additional varioble cost per instrument and then sold the instruments for $650 each Required: 1. Calculate the net operating incomes corned by Division A. Division B, and the company as a whole. 2. Assume Division As manufacturing capacity is 20,600 circuit boards. Next year, Division B wants to purchase 6,400 circuit boards from Division A rather than 5,400. (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. 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 20.600 circuit boards. Next year, Division B wants to purchase 6,400 circuit boards from Division A rather than 5.400. (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 Expensos Added by the division Transfer price paid Total expenses Net operating income Required 2 > 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 20,600 circuit boards. Next year, Division B wants to purchase 6,400 circuit boards from Division A rather than 5,400. (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 Assume Division A's manufacturing capacity is 20,600 circuit boards. Next year, Division B wants to purchase 6,400 circuit boards from Division A rather than 5,400. (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 Sell the 1,000 additional circuit boards to Division B. (Required 1 Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started