Q1

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, which sells only to department B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation. MarleysManufacturingIncomeStatement Month Ending August 31, 2018 \begin{tabular}{lrr} \hline & Dept. A & Dept. B \\ \hline Sales & $23,000 & $51,000 \\ Cost of goods sold & 11,270 & 26,520 \\ \cline { 2 - 3 } Gross profit & $11,730 & $24,480 \\ \cline { 2 - 3 } \end{tabular} Expenses: Utility expenses \begin{tabular}{rr} $920 & $3,060 \\ 5,750 & 10,710 \\ 2,300 & 15,300 \\ \hline$8,970 & $29,070 \\ \hline% & \\ \hline \end{tabular}