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only do a and b1 Mack's Juices produces and bottles a line of frult juices. The manufacturing process entalls mixing and adding Juices and other
only do a and b1
Mack's Juices produces and bottles a line of frult juices. The manufacturing process entalls mixing and adding Juices and other ingredients at the bottling plant, which is a part of Blending Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each. Because the appearance of the bottle heavlly Influences sales volume, Mack's developed a unique bottle production process at the company's container plant, which is a pait of Packaging Division. Blending Division uses all of the container plant's production. Each division (Blending and Packaging) Is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer plice to use for the bottles produced for Blending Division. At your request, Packaging Division's general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Blending Division. These competitive prices follow: a. An equivalent case represent 524 bottles. Rackaging Division's cost analysisindicates that it can produce bottles at these costs. These costs include fixed costs of $680,000 and varlable casts of $16.80 per equivalent case. These data have caused considerable corporate discussion as to the propereprice to use in the transfer of-bottles from Packaging Division to Blending Division. This interest is heightened because a significantportion of a division manager'sincome is an:Incentive bonus based on profit center results. Blending Division has the following costs in-addition to the botttle costs: The corporate marketing group has furnished the following price-demand relationship for the finished product: Requlred: Q. Mack's Julces has used market price -based transfer prices in the past. Using the current market prices and costs and assuming a volume of 300,000 cases, calculate operating profits for the Packaging Division, Blending Division, and Mack's Julces. b-1. Calculate operating profits for Packaging, Blending, and Mack's Juices for volumes of 100,000,200,000 and 300,000 cases. b.2. Which volume of production is the most profitable for Packaaina. Blendina. and Mack's Juices? Answer is not complete. Complete this question by entering your answers in the tabs below. Mack's Juices has used market price-based transfer prices in the past. Using the current market prices and costs and assuming a volume of 300,000 cases, calculate operating profits for the Packaging Division, Blending Division, and Mack's Juices. Note: Enter your answers in thousands of dollars. Answer is not complete. Complete this question by entering your answers in the tabs below. Calculate operating profits for Packaging, Blending, and Mack's Juices for volumes of 100,000, 200,000 and 300,000 cases. Note: Enter your answers in thousands of dollarsStep by Step Solution
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