The Dutton Company is decentralized, and divisions are considered investment centers. Dutton has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes (Clck the icon to view additional information.) the oak chairs and then purchases and attaches the seat cushions. Read the requirements. Requirement 1. Determine the total contributlon margin for Dutton Company for the quarter. Number of units 1,600 1,600 X. Contribution margin per u nitTotal contribution margin Requirements Chair Division Cushion Division Total Requirement 2. Assume the Chair Division purchases the 1,600 cushions needed from the Cushion Division at its current sales price. What is t 27,200 27,200 54,400 1. Determine the total contribution margin for Dutton Company for the quarter 2. Assume the Chair Division purchases the 1,600 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? Assume the Chair Division purchases the 1,600 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? Review your answers for Requirements 1, 2, and 3. What is the best option for Dutton Company? Assume the Cushion Divislon has capacity of 3,200 cushlons per quarter and can continue to supply its outside customers with 1,600 cushions per quarter and also supply the Chair Division with 1,600 cushions per quarter. What transfer price should Dutton Company set? Explain your reasoning. Using the transfer price you determined, calculate the tolal contribution margin for the quarter Number of units 1600 1600 x Contribution margin per unit Total contribution margin 3. Chair Division Cushion Division Total 4. 5. Print Done Enter any number in the edit fields and then click Check Answer The Dutton Company is decentralized, and divisions are considered investment centers. Dutton has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes (Clck the icon to view additional information.) the oak chairs and then purchases and attaches the seat cushions. Read the requirements. Requirement 1. Determine the total contributlon margin for Dutton Company for the quarter. Number of units 1,600 1,600 X. Contribution margin per u nitTotal contribution margin Requirements Chair Division Cushion Division Total Requirement 2. Assume the Chair Division purchases the 1,600 cushions needed from the Cushion Division at its current sales price. What is t 27,200 27,200 54,400 1. Determine the total contribution margin for Dutton Company for the quarter 2. Assume the Chair Division purchases the 1,600 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? Assume the Chair Division purchases the 1,600 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? Review your answers for Requirements 1, 2, and 3. What is the best option for Dutton Company? Assume the Cushion Divislon has capacity of 3,200 cushlons per quarter and can continue to supply its outside customers with 1,600 cushions per quarter and also supply the Chair Division with 1,600 cushions per quarter. What transfer price should Dutton Company set? Explain your reasoning. Using the transfer price you determined, calculate the tolal contribution margin for the quarter Number of units 1600 1600 x Contribution margin per unit Total contribution margin 3. Chair Division Cushion Division Total 4. 5. Print Done Enter any number in the edit fields and then click Check
