Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

image text in transcribed

ivision A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside ustomers. Last year, the following activity occurred in Division A : Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division 8 were used in an electronic instrument manufactured by that division (one board per instrument). Division B incurred $220 in additional variable cost per instrument and then sold the instruments for $670 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 20,500 circuit boards. Next ycar, Division 8 wants to purchase 5,900 circuit boards from Division A rather than 4,900. (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. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. ivision A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside ustomers. Last year, the following activity occurred in Division A: 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 that division (one board per instrument). Division B incurred $220 in additional variable cost per instrument and then sold the instruments for $670 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 20,500 circuit boards. Next year, Division B wants to purchase 5,900 circuit boards from Division A rather than 4,900. (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 8 or continue to sell them to outside Complete this question by entering your answers in the tabs below. Assume Division A's manufacturing capacity is 20,500 circuit boards. Next year, Division B wants to purchase 5,900 circuit standpoint of the company as a whole, should Division A sell the additional 1,000 circuit boards to Division 8 or continue to sell them to outside customers? Show iessa Continue to sell the additional 1,000 circuit boards to outside customers. Sell 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 to Expert-Tailored 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