Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

work Seved Help Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside

image text in transcribed
image text in transcribed
work Seved Help Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: $ $ 179 129 Selling price per circuit board Variable cost per circuit board Number of circuit boards: Produced during the year Sold to outside customers Sold to Division B 20,200 15,700 4,500 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic Instrument manufactured by that division (one board per instrument). Division B incurred $230 in additional varloble cost per instrument and then sold the instruments for $670 each Required: 1. Calculate the net operating incomes corned by Division A. Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,200 circuit boards. Next year, Division B wants to purchase 5,500 circuit boards from Division A rather than 4,500. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. Division A Division B Total Company Sales Korvants Corporation operates a Medical Services Department for its employees. Charges to the company's operating departments for the variable costs of the Medical Services Department are based on the actual number of employees in each department. Charges for the fixed costs of the Medical Services Department are based on the long-run average number of employees in each operating department Variable Medical Services Department costs are budgeted at $57 per employee. Fixed Medical Services Department costs are budgeted at $604,200 per year. Actual Medical Services Department costs for the most recent year were $105,300 for variable costs and $610,000 for fixed costs. Data concerning employees in the three operating departments follow: Cutting Milling Assembly Budgeted number of employees 604 298 916 Actual number of employees for the most recent year 584 398 816 Long-run average number of employees 1,050 700 1,750 Required: 1. Determine the Medical Services Department charges for the year to each of the operating departments --Cutting. Milling, and Assembly 2. How much, if any of the actual Medical Services Department costs for the year should be treated as a spending variance and not charged to the operating departments? Complete this question by entering your answers in the tabs below. Required: Required 2 Determine the Medical Services Department charges for the year to each of the operating departments --Cutting, Milling, and Assembly Cutting Milling Assembly Medical services deoartment chances

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Basic Finance An Introduction to Financial Institutions Investments and Management

Authors: Herbert B. Mayo

10th edition

1111820635, 978-1111820633

Students also viewed these Accounting questions