Question
I need some help with the solution of the following problems in preparation of my exams, thank you so much Monises Company manufactures only one
I need some help with the solution of the following problems in preparation of my exams, thank you so much
Monises Company manufactures only one type of oxygen tank; and, it has two divisions, the Compressor Division, and the Assembly Division. The Compressor Division manufactures compressors for the Assembly Division, which completes the oxygen tanks and sells it to retailers. The Compressor Division "sells" compressors to the Assembly Division. The market price for the Assembly Division to purchase a compressor is Php 41.50.The fixed costs for the Compressor Division are assumed to be the same over the range of 6,000-9,000 units. The fixed costs for the Assembly Division are assumed to be Php 8.00 per unit at 9,000 units.
Compressor's costs per compressor are:
Direct materials18.50
Direct labor8.75
Variable overhead4.00
Division fixed costs8.00
Assembly's costs per completed air conditioner are:
Direct materials165.00
Direct labor75.00
Variable overhead17.00
Division fixed costs8.00
Compute the transfer price per compressor from the Compressor Division to the Assembly Division if the method used to place a value on each compressor is 160% of variable costs.
Select one:
a. Php 44.00
b. Php 42.00
c. Php 50.00
d. Php 48.00
2. Dalia Dairy has two divisions, Distribution and Production. The company's primary product is milk. Each division's costs are provided below:
Production:Variable costs per gallon0.07
Fixed costs per gallon0.40
Distribution:Variable costs per gallon0.08
Fixed costs per gallon0.05
The Distribution Division has been operating at a capacity of 4,500,000 gallons a week and usually purchases 2,250,000 gallons from the Production Division and 2,250,000 gallons from other suppliers at 1.00 per gallon. What is the transfer price per gallon from the Production Division to the Distribution Division, assuming the method used to place a value on each gallon of milk is 170% of variable costs?
Select one:
a. Php 0.12
b. Php 0.16
c. Php 0.10
d. Php 0.14
Shiela Corporation has two divisions, Refining and Production. The company's primary product is Quick-dry Cement Mix. Each division's costs are provided below:
Production: Variable costs per bag of cement mixPhp 11
Fixed costs per bag of cement mixPhp 7
Refining:Variable costs per bag of cement mixPhp 31
Fixed costs per bag of cement mixPhp 37
The Refining Division has been operating at a capacity of 42,000 bags a day and usually purchases 25,750 from the Production Division and 16,250 bags of cement mix from other suppliers at Php 62 per bag. Based on the provided information, what is the transfer price per bag from the Production Division to the Refining Division, assuming the method used to place a value on each bag of cement mix is 190% of variable costs?
Select one:
a. Php 21.95
b. Php 20.90
c. Php 22.05
d. Php 21.90
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