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Please help me solve new operating income in dollar and percentage in Dept B Assume you are the department B manager for Marley's Manufacturing. Marley's
Please help me solve new operating income in dollar and percentage in Dept B
Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, sells only to department B (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. B Sales $21,000 $52,000 Cost of goods sold 10,080 27,560 $10,920 $24,440 840 3,120 Gross profit Utility expenses Wages expense Costs allocated from corporate 5,250 10,920 15,600 1,890 Total expenses $7,980 $29,640 Operating income/(loss) in dollars $2,940 -$5,200 Operating income/(loss) in percentage 14 % -10 % Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley's Manufacturing. Determine the operating income for department B, assuming department A "sold" department B 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place. New operating income/(loss) for department B in dollars 5,050 x New operating income/(loss) for department B in percentage %Step by Step Solution
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