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The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $53 per unit. Division B is able to supply
The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $53 per unit. Division B is able to supply Division A with 17,200 units at a variable cost of $51 per unit. The two divisions have recently negotiated a transfer price of $50 per unit for the 17,200 units. Enter an increase as a positive number and a decrease as a negative number. a. By how much will each division's income increase as a result of this transfer? Division A -17,200 Division B 51,600 b. What is the total increase in income for Hibiscus Company? 34,400 Using the data below for the Ace Guitar Company: B Region A Region $741,000 Sales Cost of goods sold Selling expenses $399,000 151,600 281,600 177,800 95,800 Support department expenses: Purchasing Payroll accounting $191,500 127,700 Allocate support department expenses proportional to the sales of each region. Determine the divisional operating income for the A and B regions. For interim calculations, round percentages to two decimal places and all other amounts to the nearest whole dollar. A Region Operating Income 207,480 B Region Operating Income 111,720
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