{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T07:49:27-04:00", "answer_date": "2024-06-28 07:49:27", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4266740", "url": "\/study-help\/questions\/use-the-following-information-to-answer-questions-2-and-3-4266740", "question_creation_date_js": "2024-06-28T07:49:27-04:00", "question_creation_date": "Jun 28, 2024 07:49 AM", "meta_title": "[Solved] Use the following information to answer q | SolutionInn", "meta_description": "Answer of - Use the following information to answer questions 2 and 3: Flangers Corp. operates two divisions. The following data r | SolutionInn", "meta_keywords": "information,answer,questions,2,3,flangers,corp,operates,two,divisions,data,relate", "question_title_h1": "Use the following information to answer questions 2 and 3: Flangers Corp. operates two divisions. The following data relate to its Motor Division: Cash $350,000", "question_title": "Use the following information to answer questions 2 and 3: Flangers Corp.", "question_title_for_js_snippet": "Use the following information to answer questions 2 and 3 Flangers Corp operates two divisions The following data relate to its Motor Division Cash $350,000 Inventories 462,000 Prop, plant and equip, net 3,920,000 Total division assets $4,732,000 The Motor Division manufactures a heavy duty motor that can be used for midsize tools The variable costs of manufacturing are $175 per unit and fixed manufacturing costs per unit are $21 at a level of 70,000 units of production Of the 70,000 motors produced annually, 14,000 are transferred to the company's Chainsaw Division The two division managers cannot agree on the price at which these engines should be sold The Chainsaw Division's manager has offered to pay $198, which is the price at which the motors can be purchased from an outside supplier The Motor Division's manager feels that the Chainsaw Division should pay $210, which is the current sales price to external customers The company's controller has performed an analysis of the Motor Division and has determined that if the division discontinues transfers to the Chainsaw Division, it can eliminate fixed costs of $35,000 The Motor Division can allocate its freed up resources to produce a new product that is estimated to bring in an annual contribution margin of $44,800 Assuming you are the manager of the Motor Division, should the transfer of the motors to the Chainsaw Division at $198 be made a)No, the loss over discontinuing transfers is $7,000 b)No, the loss over discontinuing transfers is $51,800 c)Yes, the profit over discontinuing transfers is $82,200 d)Yes, the profit over discontinuing transfers is $242,200 2) Assume that management decides the motors will be sold to the Chainsaw Division using a transfer price of $198 If the Motor Division sets its prices based on total production costs, at what price should the 56,000 motors be sold to external customers to achieve a 12 return on assets for the Motor Division a) $164 51 b) $179 39 c) $203 90 d) $205 64", "question_description": "

Use the following information to answer questions 2 and 3:<\/strong><\/p>

Flangers Corp. operates two divisions. The following data relate to its Motor Division:<\/p>

<\/p>

Cash $350,000<\/p>

Inventories 462,000<\/p>

Prop, plant and equip, net 3,920,000<\/p>

Total division assets: $4,732,000<\/p>

<\/p>

The Motor Division manufactures a heavy-duty motor that can be used for midsize tools. The variable costs of manufacturing are $175 per unit and fixed manufacturing costs per unit are $21 at a level of 70,000 units of production. Of the 70,000 motors produced annually, 14,000 are transferred to the company's Chainsaw Division. The two division managers cannot agree on the price at which these engines should be sold. The Chainsaw Division's manager has offered to pay $198, which is the price at which the motors can be purchased from an outside supplier. The Motor Division's manager feels that the Chainsaw Division should pay $210, which is the current sales price to external customers.<\/p>

<\/p>

The company's controller has performed an analysis of the Motor Division and has determined that if the division discontinues transfers to the Chainsaw Division, it can eliminate fixed costs of $35,000. The Motor Division can allocate its freed up resources to produce a new product that is estimated to bring in an annual contribution margin of $44,800.<\/p>

<\/p>

<\/p>

  1. Assuming you are the manager of the Motor Division, should the transfer of the motors to the Chainsaw Division at $198 be made?<\/li><\/ol>

    a)No, the loss over discontinuing transfers is $7,000.<\/p>

    b)No, the loss over discontinuing transfers is $51,800.<\/p>

    c)Yes, the profit over discontinuing transfers is $82,200.<\/p>

    d)Yes, the profit over discontinuing transfers is $242,200.<\/p>

    <\/p>

    2) Assume that management decides the motors will be sold to the Chainsaw Division using a transfer price of $198. If the Motor Division sets its prices based on total production costs, at what price should the 56,000 motors be sold to external customers to achieve a 12% return on assets for the Motor Division?<\/p>

    <\/p>

    a) $164.51 b) $179.39 c) $203.90 d) $205.64<\/p>", "transcribed_text": "", "related_book": { "title": "Income Tax Fundamentals 2013", "isbn": "1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516", "edition": "31st Edition", "authors": "Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1124.jpg", "uri": "\/textbooks\/income-tax-fundamentals-2013-31st-edition-9781285586618", "see_more_uri": "" }, "free_related_book": { "isbn": "1787398277", "uri": "\/textbooks\/bang-2-the-complete-history-of-the-universe-1st-edition-978-1787398276-290353", "name": "Bang 2 The Complete History Of The Universe", "edition": "1st Edition" }, "question_posted": "2024-06-28 07:49:27", "see_more_questions_link": "\/study-help\/questions\/business-management-leadership-2023-June-05", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/on-january-1-2014-pitt-company-purchased-an-80-investment", "description": "On January 1, 2014, Pitt Company purchased an 80% investment in Saxe Company. The acquisition cost was equal to Pitts equity in Saxes recorded net assets at that date. On January 1, 2014, Pitt and...", "stars": 3.5 }, { "url": "\/study-help\/psychology\/what-was-the-independent-variable-was-it-a-direct-intervention-1979843", "description": "What was the independent variable? Was it a direct intervention specifically designed as part of the study?", "stars": 3.5 }, { "url": "\/the-ledger-of-gower-corporation-at-december-31-2014-contains", "description": "The ledger of Gower Corporation at December 31, 2014, contains the following summary data. Your analysis reveals the following additional information that is not included in the above data. 1. The...", "stars": 3 }, { "url": "\/study-help\/questions\/if-you-are-not-sure-about-the-answers-please-let-9874166", "description": "if you are not sure about the answers please let someone who knows answer them . Evaluate value add and non value add . Example: Going to the Dentist, the process is your regular dental exam Step...", "stars": 3 }, { "url": "\/study-help\/questions\/1-assume-there-is-no-secondary-market-for-the-bond-2854713", "description": "1: Assume there is no secondary market for the bond in this question. In your own words, describe, qualitatively, in as much detail as necessary to persuade the instructor that you fully understand...", "stars": 3 }, { "url": "\/study-help\/questions\/the-following-table-shows-the-daily-receipts-in-millions-of-2024811", "description": "The following table shows the daily receipts in millions of dollars of the movie \"Avatar\" for successive Fridays after its opening on Friday 18 December 2009. Weeks $Receipts 0 77.025 2 68.49 4...", "stars": 3 }, { "url": "\/study-help\/questions\/6-a-charge-q-is-at-the-centre-of-a-8082085", "description": "6. A charge Q is at the centre of a tetrahedron. What is the electric flux through one face of the tetrahedron?", "stars": 3 }, { "url": "\/study-help\/questions\/4-a-cylinder-with-radius-r-075m-and-length-8082086", "description": "4. A cylinder with radius r = 0.75m and length 0.6 m has an infinite line of positive charge along its axis. The charge per unit length is 7 uC\/m. (a) Calculate the electric flux through the surface...", "stars": 3 }, { "url": "\/study-help\/questions\/a-charge-of-6-c-is-moved-from-a-point-8082087", "description": "A charge of 6 C is moved from a point, the potential at which is 120 V, to another point of potential V. If the energy required to do so is 250 Joule, calculate V.", "stars": 3 }, { "url": "\/study-help\/questions\/the-electric-potential-at-a-point-due-to-a-point-8082088", "description": "The electric potential at a point due to a point charge' q' is 50 V and the electric field at the same point is", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/for-each-of-the-following-compute-the-present-value-do-4266739", "next": "\/study-help\/questions\/the-securities-and-exchange-commission-sec-is-mandated-to-regulate-4266741" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Use the following information to answer questions 2 and 3: Flangers Corp.", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/use-the-following-information-to-answer-questions-2-and-3-4266740" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } } } }