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The Costa Company is decentralized, and divisions are considered investment centers. Costa has one division that manufactures oak dining room chairs with upholstered seat
The Costa Company is decentralized, and divisions are considered investment centers. Costa has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions. Requirement 1. Determine the total contribution margin for Costa Company for the quarter. Number of units Chair Division 1000 Cushion Division 1000 Total Contribution margin per unit 13 = = Total contribution margin 13000 17000 17 30000 i (Click the icon to view additional information.) Read the requirements. Requirement 2. Assume the Chair Division purchases the 1,000 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? Number of units Chair Division 1000 Cushion Division Total 1000 Contribution margin per unit = Total contribution margin 17 17000 17000 17 = 34000 QuestionTICIP Requirement 3. Assume the Chair Division purchases the 1,000 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? (Enter "0" for any zero amounts.) Number of units Contribution margin per unit = Total contribution margin Chair Division Cushion Division = Total Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Costa Company? Choose from any list or enter any number in the input fields and then continue to the next question.
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