Hi there again, thank you so much for your good job. Could you please look over these docs? Thank you kindly.

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Lilofar

QUESTION 1 Incorrect 0.00 points out of 5.00 Appropriate Transfer Prices: Opportunity Costs Plains Peanut Butter Company recently acquired a peanut-processing company that has a normal annual capacity of 4,000,000 pounds and that sold 2,700,000 pounds last year at a price of $2.00 per pound. The purpose of the acquisition is to furnish peanuts for the peanut butter plant, which needs 1,700,000 pounds of peanuts per year. It has been purchasing peanuts from suppliers at the market price. Production costs per pound of the peanut-processing company are as follows: Direct materials $0.50 Direct labor 0.23 Variable overhead 0.14 Fixed overhead at normal capacity 0.20 Total $1.07 Management is trying to decide what transfer price to use for sales from the newly acquired Peanut Division to the Peanut Butter Division. The manager of the Peanut Division argues that $2.00, the market price, is appropriate. The manager of the Peanut Butter Division argues that the cost price of $1.07 (or perhaps even less) should be used since xed overhead costs should be recomputed. Any output of the Peanut Division up to 2,700,000 pounds that is not sold to the Peanut Butter Division could be sold to regular customers at $2.00 per pound. (a) Compute the annual gross prot for the Peanut Division using a transfer price of $2.00. $ 0 (b) Compute the annual gross prot for the Peanut Division using a transfer price of $1.07. $ 0 (c) Which of the following is least likely to motivate the manager to take actions that will maximize corporate prots? Set the transfer price at 2.00 for all transfers. Set the transfer price at .87 for all transfers. Set the transfer price at .87 for the rst 1,300,000 lbs. transferred. Set the transfer price at .87 for the rst 1,200,000 lbs. transferred, and at 2.00 for the next 400,000 lbs. transferred. None of the above. Incorrect Marks for this submission: 0.00/5.00. Support QUESTION 2 Partially correct 0.71 points out of 5.00 Dual Transfer Pricing The Greek Company has two divisions, Beta and Gamma. Gamma Division produces a product at a variable cost of $6 per unit, and sells 140,000 units to outside customers at $10 per unit and 50,000 units to Beta Division at variable cost plus 40 percent. Under the dual transfer price system, Beta Division pays only the variable cost per unit. Gamma Division's xed costs are $240,000 per year. Beta Division sells its nished product to outside customers at $22 per unit. Beta has variable costs of $5 per unit, in addition to the costs from Gamma Division. Beta Division's annual xed costs are $150,000. There are no beginning or ending inventories. (a) Prepare the income statements for the two divisions and the company as a whole. Do not use negative signs with your answers. Greek Company Divisional Income Statement Beta Gamma Sales: External Company $ 0 $ 0 $ 0 Internal 0 0 0 Total 0 0 0 Variable costs: Incurred 0 0 0 Transferred in 0 0 0 Total 0 0 0 Contribution margin 0 0 0 Fixed costs 0 0 0 Net income $ 0 $ 0 $ 0 (b) When preparing divisional income statements for a two-division company where one division sales some product internally to the other division, the sum of the net incomes of the two divisions will always equal the total net income of the company. Partially correct Support Marks for this submission: 0.71/5.00. Support QUESTION 3 Incorrect 0.00 points out of 5.00 ROI and Residual Income:Basic Computations Watkins Associated Industries is a highly diversied company with three divisions: Trucking, Seafood, and Construction. Assume that the company uses return on investment and residual income as two of the evaluation tools for division managers. The company has a minimum desired rate of return on investment of 10 percent with a 30 percent tax rate. Selected operating data for three divisions of the company follow. Sales Trucking Seafood Construction Division Division Division $1,100,000 $720,000 $900,000 Operating assets 550,000 240,000 320,000 Net operating income 106,000 56,000 59,000 (a) Compute the return on investment for each division. (Round answers to three decimal places.) Trucking ROI = 0 Seafood ROI = 0 Construction ROI = 0 (b) Compute the residual income for each division. Residual Income Trucking Net operating income $ 0 Minimum level 0 Residual income $ 0 Seafood $ 0 Construction $ 0 $ 0 0 0 $ 0 (c) Which of the following is an appropriate statement about the performance of the three divisions: Construction has the superior performance. Residual income is always superior to ROI for assessing performance. Which division has the superior performance depends on which performance evaluation metric is used to assess performance. Trucking has the superior performance. Seafood has the superior performance. Incorrect Support Marks for this submission: 0.00/5.00. QUESTION 4 Not answered 0.00 points out of 5.00 Internal or External Acquisitions: No Opportunity Costs The Van Division of MotoCar Corporation has oered to purchase 180,000 wheels from the Wheel Division for $44 per wheel. At a normal volume of 500,000 wheels per year, production costs per wheel for the Wheel Division are as follows: Direct materials Direct labor 10 Variable overhead Fixed overhead Total $15 5 18 $48 The Wheel Division has been selling 500,000 wheels per year to outside buyers at $60 each. Capacity is 700,000 wheels per year. The Van Division has been buying wheels from outside suppliers at $57 per wheel. (a) Calculate the net benet (or cost) to the Wheel Division of accepting the oer from the Van Division. $ per wheel (b) Calculate the net benet (or cost) to Motocar Corp. if the Wheel Division accepts the oer from the Van Division. $ Support per wheel