Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need the answers to this problem! Thank you! Corning company has a decentralized organization with a divisional structure. Two of these divisions are the Appliance

Need the answers to this problem! Thank you! image text in transcribed
Corning company has a decentralized organization with a divisional structure. Two of these divisions are the Appliance Division and the Manufactured Housing Division. Each divisional manager is evaluated on the basis of ROL. The Appliance Division produces a small automatic dishwasher that the Manufactured Housing Division can Use in one of its models. Appliance can produce up to 27, 000 of these dishwashers per year. The variable costs of manufacturing the dishwashers are $106. The Manufactured Housing Division inserts the dishwasher into the model hoUse and then sells the manufactured hoUse to outside customers for $72, 500 each. The division's capacity is 4, 860 units. The variable costs of the manufactured hoUse (in addition to the cost of the dishwasher itself) are $48, 200. Assume each part is independent, unless otherwise indicated. Assume that all of the dishwashers produced can be sold to external customers for $310 each. The Manufactured Housing Division wants transfer price be? Refer to Requirement 1. Assume $24 of avoidable distribution costs. Identify the maximum and minimum transfer prices. Identify the actual transfer price, assuming that negotiation splits the difference. Assume that the Appliance Division is operating at 75 percent capacity. The Manufactured Housing Division is currently buying 4, 860 dishwashers form an outside supplier for $276 each. Assume that any joint benefit will be split evenly between the two divisions. What is the expected transfer price? How much will the profits of the Appliance Division increase, assuming that it sells the extra 4, 860 dishwashers internally? How much will the profits of the firm increase under this arrangement

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

Access Audit Handbook

Authors: Alison Grant

1st Edition

1859461778, 978-1859461778

More Books

Students also viewed these Accounting questions

Question

what is a peer Group? Importance?

Answered: 1 week ago

Question

3. What should a contract of employment contain?

Answered: 1 week ago

Question

1. What does the term employment relationship mean?

Answered: 1 week ago