ezto. 5· 0.00 points 1000 points Division A manufactures electronic airouit boar
ID: 2471526 • Letter: E
Question
ezto. 5· 0.00 points 1000 points Division A manufactures electronic airouit boards. The boards can be sold either to Division B of the same oompary or to outside customers. Last year, the following activity oocurred in Division A: Selling price per circuit board Variable oost per circuit board $188 $112 Number of circuit boards Produced during the year Sold to outside customers 20,200 14,100 6,100 Sold to Division B B were at the same price as sales to outside customers. The circuit boards purchased Sales to Division Division B were used in an electronic instrument Division B incurred $230 in addibional variable cost per instrument and then sold the instruments for $620 each instrument manufactured by that division (one board per instrument) Required: Prepare income statements for Division A, Division B, and the company as a whole. Division ADivision 8 Total $20,200X 20,200 Sales Expenses: Added by the division Transfer price paid Total expenses Net operating income $ 20,200 S 20,200 2. Assume that Division A's manufacturing capacity is 20,200 circuit boards. Next year, Division B wants to purchase 7,100 circuit boards from Division A rather than 6,100 (Circuit boards of this type are not available from outside sources.) What should Division A do from the standpoint of the company as a whole? Continue to sell the circuit boards to outside customers OOSell the 1,000 additional circuit boards to Division B MacBook AiExplanation / Answer
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as the Division B is having contrbution it is advised to sell 1000 units to division B
Division A Division B Total Company Sales 3797600 3782000 7579600 Added By Division 2262400 1403000 3665400 Transfer price paid 1146800 Total Expense 2262400 2549800 3665400 net operating income 1535200 1232200 3914200Related Questions
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