Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The Cycle Division of Ayala Company has the following per unit data related to its most recent cycle called Roadbuster. $2,210 Selling price Variable cost
The Cycle Division of Ayala Company has the following per unit data related to its most recent cycle called Roadbuster. $2,210 Selling price Variable cost of goods sold Body frame Other variable costs Contribution margin $312 890 1,202 $1,008 Presently, the Cycle Division buys its body frames from an outside supplier. However Ayala has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $352 per frame. The variable cost for FrameBody is $262. The Cycle Division is willing to pay $275 to purchase the frames from FrameBody. Your answer is correct. Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1.140 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) (1) Effect on the income of the Cycle Division $ 42180 (2) Effect on the income of FrameBody 14820 (3) Effect on the income of Ayala 57000 e Textbook and Media X Your answer is incorrect. Assume that FrameBody does not have excess capacity and therefore would lose sales if the frames were sold to the Cycle Division. If the Cycle Division buys 1.140 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) (1) Effect on income of the Cycle Division $ (2) Effect on the income of FrameBody $ (3) Effect on income of Ayala e Textbook and Media Attempts: 1 of 5 used
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started