Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

just do a and b please Dakota Security Systems (DSS) is a decentralized organization that evaluates divisional management based on measures of divisional contribution margin.

image text in transcribed

image text in transcribed

just do a and b please

Dakota Security Systems (DSS) is a decentralized organization that evaluates divisional management based on measures of divisional contribution margin. Residentlal Division and Commerclal Division both sell security and monitoring equipment. Residential sells primarily to home owners and apartment management companles. Commerclal focuses on small to medium-sized businesses. Residentlal sells a particular alarm to the outside market for $258 per unit. The outside market can absorb up to 48,650 units per year. These units require 3 direct labor-hours each. If Residential modifies the units with an additional 0.75 hour of labor time, It can sell them to Commercial for $285 per unit. Commercial will accept up to 41,700 of these units per year. If Commerclal does not obtain 41,700 units from Residentlal, It purchases them for $294 each from the outside. Commerclal Incurs $150 of additional labor and other out-of-pocket costs to convert the alarm (elther from Residentlal or outside) into one that fits in an existing Commercial Division system. The units can be sold to the outside market for $654 each. Residential estimates that its total costs are $1,499,000 for fixed costs, $48.00 per direct labor-hour, and $21.60 per alarm for materlals and other varlable costs besides direct labor. Its capacity is limited to 229,500 direct labor-hours per year. Required: Determine the following: a. Total contribution margin to Residential If it sells 48,650 units outside. b. Total contribution margin to Residential If it sells 41,700 units to Commerclal. c. and d. The costs to be considered in determining the optimal company policy for sales by Residential. The annual contributions and costs for Residential and Commercial under the optimal policy. Complete this question by entering your answers in the tabs below. Determine the total contribution margin to Residential if it sells 48,650 units outside. Dakota Security Systems (DSS) is a decentralized organization that evaluates divisional management based on measures of divisiona contribution margin. Residentlal Division and Commercial Division both sell security and monitoring equlpment. Residential sells primarily to home owners and apartment management companies. Commercial focuses on small to medium-sized businesses. Residentlal sells a particular alarm to the outside market for $258 per unit. The outside market can absorb up to 48,650 units per yeal These units require 3 direct labor-hours each. If Residential modifies the units with an additional 0.75 hour of labor time, It can sell them to Commercial for $285 per unit. Commercia will accept up to 41,700 of these units per year. If Commerclal does not obtain 41,700 units from Residential, it purchases them for $294 each from the outside. Commercial Incurs $150 of additional labor and other out-of-pocket costs to convert the alarm (elther from Residential or outside) Into one that fits in an existing Commerclal Division system. The units can be sold to the outside market for $654 each. Residential estimates that its total costs are $1,499,000 for fixed costs, $48.00 per direct labor-hour, and $21.60 per alarm for materlals and other varlable costs besides direct labor. Its capacity is limited to 229,500 direct labor-hours per year. Required: Determine the following: a. Total contribution margin to Residential If it sells 48,650 units outside. b. Total contribution margin to Residential if it sells 41,700 units to Commercial. c. and d. The costs to be considered in determining the optimal company policy for sales by Residential. The annual contributions and costs for Residential and Commercial under the optimal policy. Complete this question by entering your answers in the tabs below. Determine the total contribution margin to Residential if it sells 41,700 units to Commercial

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

Recommended Textbook for

Auditing A Practical Approach

Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton

4th Edition

0730382648, 978-0730382645

More Books

Students also viewed these Accounting questions

Question

What is basis and what is the purpose of basis?

Answered: 1 week ago