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The Dutton Company is decentralized, and divisions are considered investment centers. Dutton has one division that manufactures oak dining room chairs with upholstered seat
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 the oak chairs and then purchases and attaches the seat cushions. Requirement 1. Determine the total contribution margin for Dutton Company for the quarter. Number of units Contribution margin per unit Total contribution margin 1 More Info (Click the icon Read the requirem The Chair Division currently purchases the cushions for $10 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 1,100 chairs per quarter, and the Cushion Division is operating at capacity, which is 1,100 cushions per quarter. The two divisions report the following information: Cushion Division Chair Division Cushion Division Total Requirement 2. Assume the Chair Division purchases the 1,100 cushions needed from the Cushion Division at its current sales price. What is the total contr Number of units Contribution margin per unit Total contribution margin Chair Division Sales Price per Chair Variable Cost (other than cushion) Variable Cost (cushion) Contribution Margin per Chair 80 Sales Price per Cushion 55 Variable Cost per Cushion $ 18 8 10 $ 15 10 Contribution Margin per Cushion Chair Division Cushion Division Total x Print Done Requirement 3. Assume the Chair Division purchases the 1,100 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 x Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Dutton Company? T
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