Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 27 (2.5 points) Georgia Company manufactures only one type of washing machine and has two divisions, the Compressor Division, and the Fabrication Division. The

image text in transcribed
Question 27 (2.5 points) Georgia Company manufactures only one type of washing machine and has two divisions, the Compressor Division, and the Fabrication Division. The Compressor Division manufactures compressors for the Fabrication Division, which completes the washing machine and sells it to retailers. The Compressor Division "sells" compressors to the Fabrication Division. The market price for the Fabrication Division to purchase a compressor is $60.00. (Ignore changes in inventory.) The fixed costs for the Compressor Division are assumed to be the same over the range of 13,000-18,000 units. The fixed costs for the Fabrication Division are assumed to be $11.00 per unit at 18,000 units. Compressor's costs per compressor are: Direct materials $17 Direct labor $14.50 Variable overhead $3.50 Division fixed costs $11.50 Fabrication's costs per completed air conditioner are: Direct materials $154.00 Direct labor $67.50 Variable overhead $26.00 Division fixed costs $11.50 If the Fabrication Division sells 1000 air conditioners at a price of $475.00 per washing machine to customers, what is the operating income of both divisions together? $147,000 O $151,000 $169,500 $167,500

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Management Concepts And Skills

Authors: Samuel Certo, S Certo

15th global Edition

978-1292265193, 1292265191

More Books

Students also viewed these Accounting questions