Old Towne Chocolates manufactures specialty chocolates and sells them to fine candy stores. The company operates two divisions, cocoa and candy, as decentralized entities. The cocoa division purchases raw cacao beans and processes them into cocoa powder. The candy division purchases cocoa powder and other ingredients and uses them to produce gourmet chocolates. (Click the iconi lo view additional information.) A (Click the icon to view next month's projections.) Read the requirements Requirement 1. Compute the transfer price per pound of processed cocca. If each division is considered a profit center, would the candy production manager choose to purchase 4,000 pounds next month from Fun Time Foods? (Do not round intermediary calculations. Round the amount entered the nearest cont.) The transfer price per pound of processed cocos is Because this amount is the purchase price of $13.00 the candy division manager would choose to purchase the 4,000 pounds from Requirement 2. What would be the cost to Old Towne Chocolates if the 4,000 pounds had been produced by the cocoa division and transferred to the candy division? Is the external purchase in the best interest of Old Town Chocolates? What is the cause of this goal incongruerice? Since the cocoa division More Info operating at capacity, the cost to produce the additional 4,00D pounds is per pound. Is the external purchase in the best interest of Old Towne Chocolates? The purchase cost the company In the best interest of Old Towne because, if produced intemally the additional 4.000 pounds would If purchased from Fun Time, the cocoa would cost With the increase in demand for dark chocolate, the candy production division expects to use 34,000 pounds of cocoa next month. Fun Time Foods has offered to sell 4.000 pounds of cocoa next month to the candy production division for $13.00 per pound. What is the cause of this goal incongruence? (Select all that apply.) Print Done A. setting a transfer price based on full cost treats fixed costs as variable B. selling the price above full cosi (110%) artificially in lates the cost to the purchasing division c. setting a transfer price based on market cost treats variable costs as fixed D. producing close to capacity can put the entire company at risk of stock-outs E. purchasing the cocoa for less than the transfer price may put the production department in jeopardy Requirement 3. The candy division manager suggests that $13.00 is now the market price for processed cocoa, and that this should be the new transfer price. Old Towne's corporate management tends to agree. The cocos division manager is suspicious. Fun Time's prices have always been much higher than $13.00 per pound. Why the sudden price cut? Atter further investigation by the cocos division manager, it is revealed that the $13.00 per pound price was a one-time-only offer made to the candy division due to excess Inventory at Fun Time. Future orders would be priced at $13.50 per pound. Comment on the validity of the $13.00 per pound market price and the ethics of the candy manager. Would changing the transfer price to $13.00 matter to Old Towne Chocolates? Choose from any list or enter any number in the input fields and then continue to the next question. Old Towne Chocolates manufactures specialty chocolates and sells them to fine candy stores. The company operates two divisions, cocoa and candy, as decentralized entities. The cocoa division purchases raw cacao beans and processes them into Cocoa xwder. The candy division purchases cocoa powder and other ingredients and uses them to produce gourmet chocolates (Click the loon to view additional Information.) (Click the loan to view next month's projections.) Read the requirements A More Info the candy division manager would choose to purchase the 4,000 pounds from Requirement 2. What would be the oost to Old Towne Chocolates if the 4,000 pounds had been produced by the cocca division and transfe cause of this goal incongruence? tes? What is the Since the cocoa division operating at capacity, the cost to produce the adultional 4,000 pounds is per pound. Is the external purchase in the best interest of Old Towne Chocolates 7 The purchase in the best interest of Old Towne because, if produced internally the additional 4.000 pounds would . If purchased from Fun Time, the cooca vould cost cost the company The cocos division is free to sell processed coobe to outside buyers, and the candy division is free to purchase processed cocoa from other sources. Currently, however, the cocos division sets all of its output to the candy division, and the candy division does not purchase materials from outside suppliers. The processed cocoa is transferred from the cocoa division to the production division at 110% of full cost. The cocos division purchases raw cacao beans for $5 per pound. The cocoa division uses 1.5 pounds of raw cacao beans to produce one pound of processed cocoa. The division's other variable costs equal $2.50 per pound of outout, and fixed costs at a monthly production level of 32,000 pounds of cocoa e $2.50 per pound. During the most recent month, 32,000 pounds of processed cocoa were transferred between the two divisions. The cocoa division's capacity is 39.000 pounds of output What is the cause of this goal incongruence? (Select all that apply.) A. setting a transfer price based on full cost treats fixed costs as variable B. setting the price above full cost (110%) artificially Intiates the cost to the purchasing division C. Setting a transfer price based on market cost treats variable costs as Fixed ID producing close to capacity can put the entire company at risk of stock-outs E. purchasing the cocoa for less than the transfer price may put the production department in jeopardy Print Done Requirement 3. The candy division manager suggests that $13.00 is now the market price for processed cocoa, and that this should be the new transfer price. Old Towne's corporate management tends to agree. The Cocoa division manager is suspicious. Fun Time's prices have always been much higher than $13.00 per pound. Why the sudden price cut? After further investigation by the cocoa division manager, it is revealed that the $13.00 per pound price was a one-time-only offer made to the candy division due to excess inventory at Fun Time. Future orders would be priced at $13.50 per pound. Comment on the validity of the $13.00 per pound market price and the ethics of the candly manager. Would changing the transfer price to $13.00 matter to Old Towne Chocolates? $13.00 V a valid marke: price because it be replicated on future orders. is a more appropriate market price. The candy manager acting ethically in this situation because he or she was pertinent information from both upper management and the cocoa division manager and was promoting a position known to be If the transfer price had been changed to $13.00, it have affected the company overall, but profit incentive rewards would have been shifled way from the division manager and to the manager. Choose from any list or enter any number in the input fields and then continue to the next question. ? Save for Later 1 Type here to search O 10:28 PM 4/4/2020 Old Towne Chocolates manufactures specialty chocolates and sells them to fine candy stores. The company operates two divisions, cocoa and candy, as decentralized entities. The cocoa division purchases raw cacao beans and processes them into cocoa powder. The candy division purchases cocoa powder and other ingredients and uses them to produce gourmet chocolates. (Click the iconi lo view additional information.) A (Click the icon to view next month's projections.) Read the requirements Requirement 1. Compute the transfer price per pound of processed cocca. If each division is considered a profit center, would the candy production manager choose to purchase 4,000 pounds next month from Fun Time Foods? (Do not round intermediary calculations. Round the amount entered the nearest cont.) The transfer price per pound of processed cocos is Because this amount is the purchase price of $13.00 the candy division manager would choose to purchase the 4,000 pounds from Requirement 2. What would be the cost to Old Towne Chocolates if the 4,000 pounds had been produced by the cocoa division and transferred to the candy division? Is the external purchase in the best interest of Old Town Chocolates? What is the cause of this goal incongruerice? Since the cocoa division More Info operating at capacity, the cost to produce the additional 4,00D pounds is per pound. Is the external purchase in the best interest of Old Towne Chocolates? The purchase cost the company In the best interest of Old Towne because, if produced intemally the additional 4.000 pounds would If purchased from Fun Time, the cocoa would cost With the increase in demand for dark chocolate, the candy production division expects to use 34,000 pounds of cocoa next month. Fun Time Foods has offered to sell 4.000 pounds of cocoa next month to the candy production division for $13.00 per pound. What is the cause of this goal incongruence? (Select all that apply.) Print Done A. setting a transfer price based on full cost treats fixed costs as variable B. selling the price above full cosi (110%) artificially in lates the cost to the purchasing division c. setting a transfer price based on market cost treats variable costs as fixed D. producing close to capacity can put the entire company at risk of stock-outs E. purchasing the cocoa for less than the transfer price may put the production department in jeopardy Requirement 3. The candy division manager suggests that $13.00 is now the market price for processed cocoa, and that this should be the new transfer price. Old Towne's corporate management tends to agree. The cocos division manager is suspicious. Fun Time's prices have always been much higher than $13.00 per pound. Why the sudden price cut? Atter further investigation by the cocos division manager, it is revealed that the $13.00 per pound price was a one-time-only offer made to the candy division due to excess Inventory at Fun Time. Future orders would be priced at $13.50 per pound. Comment on the validity of the $13.00 per pound market price and the ethics of the candy manager. Would changing the transfer price to $13.00 matter to Old Towne Chocolates? Choose from any list or enter any number in the input fields and then continue to the next question. Old Towne Chocolates manufactures specialty chocolates and sells them to fine candy stores. The company operates two divisions, cocoa and candy, as decentralized entities. The cocoa division purchases raw cacao beans and processes them into Cocoa xwder. The candy division purchases cocoa powder and other ingredients and uses them to produce gourmet chocolates (Click the loon to view additional Information.) (Click the loan to view next month's projections.) Read the requirements A More Info the candy division manager would choose to purchase the 4,000 pounds from Requirement 2. What would be the oost to Old Towne Chocolates if the 4,000 pounds had been produced by the cocca division and transfe cause of this goal incongruence? tes? What is the Since the cocoa division operating at capacity, the cost to produce the adultional 4,000 pounds is per pound. Is the external purchase in the best interest of Old Towne Chocolates 7 The purchase in the best interest of Old Towne because, if produced internally the additional 4.000 pounds would . If purchased from Fun Time, the cooca vould cost cost the company The cocos division is free to sell processed coobe to outside buyers, and the candy division is free to purchase processed cocoa from other sources. Currently, however, the cocos division sets all of its output to the candy division, and the candy division does not purchase materials from outside suppliers. The processed cocoa is transferred from the cocoa division to the production division at 110% of full cost. The cocos division purchases raw cacao beans for $5 per pound. The cocoa division uses 1.5 pounds of raw cacao beans to produce one pound of processed cocoa. The division's other variable costs equal $2.50 per pound of outout, and fixed costs at a monthly production level of 32,000 pounds of cocoa e $2.50 per pound. During the most recent month, 32,000 pounds of processed cocoa were transferred between the two divisions. The cocoa division's capacity is 39.000 pounds of output What is the cause of this goal incongruence? (Select all that apply.) A. setting a transfer price based on full cost treats fixed costs as variable B. setting the price above full cost (110%) artificially Intiates the cost to the purchasing division C. Setting a transfer price based on market cost treats variable costs as Fixed ID producing close to capacity can put the entire company at risk of stock-outs E. purchasing the cocoa for less than the transfer price may put the production department in jeopardy Print Done Requirement 3. The candy division manager suggests that $13.00 is now the market price for processed cocoa, and that this should be the new transfer price. Old Towne's corporate management tends to agree. The Cocoa division manager is suspicious. Fun Time's prices have always been much higher than $13.00 per pound. Why the sudden price cut? After further investigation by the cocoa division manager, it is revealed that the $13.00 per pound price was a one-time-only offer made to the candy division due to excess inventory at Fun Time. Future orders would be priced at $13.50 per pound. Comment on the validity of the $13.00 per pound market price and the ethics of the candly manager. Would changing the transfer price to $13.00 matter to Old Towne Chocolates? $13.00 V a valid marke: price because it be replicated on future orders. is a more appropriate market price. The candy manager acting ethically in this situation because he or she was pertinent information from both upper management and the cocoa division manager and was promoting a position known to be If the transfer price had been changed to $13.00, it have affected the company overall, but profit incentive rewards would have been shifled way from the division manager and to the manager. Choose from any list or enter any number in the input fields and then continue to the next question. ? Save for Later 1 Type here to search O 10:28 PM 4/4/2020