Q5CH11.....

Exercise 11A-2 (Algal Transfer Pricing from the Viewpoint of the Entire Company [LO11-5] Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board $ 199 Variable cost per circuit. board .5: 121 Nmrlber of circuit boards: Produced during the year 20,100 Sold to outside customers 15,500 Sold to Division B 5,200 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic instrument manufactured by that division {one board per instrument]. Division B incurred $220 in additional variable cost per instrument and then sold the instruments for $610 each. Required: '1. Prepare income statements for Division A. Division B. and the company as a whole. 2. Assu me Division A's manufacturing capacity is 20.700 circuit boards. Next year. Division B wants to purchase 6,200 circuit boards from Division A rather than 5,200. [Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole. should Division Asell the additional 1.000 circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare income statements for Division A, Division B, and the company as a whole. Division A Division B Total Company Sales Expenses: Added by the division Transfer price paid Total expenses Net operating incomeComplete this question by enhering your answers In the tabs below. Requiredl Required2 Assume Division A's manufacturing capacity is 20,?00 circuit boards. Next year, Division B wants to purchase 6,200 circuit boards from Division A rather than 5,200. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the additional 1,000 circuit boards to Division B or continue to sell them to outside customers? Show last. Continue to sell the additional 11000 circuit boards to outside customers. OSeII the 1,000 additional circuit boards to Division B