Business, 21.04.2020 04:53 Alexmills6093
Garcon Inc. manufactures electronic products, with two operating divisions, Consumer and Commercial. Condensed divisional income statements, which involve no intracompany transfers and which include a breakdown of expenses into variable and fixed components, are as follows:
Garcon Inc.
Divisional Income Statements
For the Year Ended December 31, 20Y2
1. Consumer Division Commercial Division Total
2. Sales:
3. 14,400 units × $144 per unit $2,073,600.00 $2,073,600.00
4. 21,600 units × $275 per unit $5,940,000.00 5,940,000.00
5. Total sales $2,073,600.00 $5,940,000.00 $8,013,600.00
6. Expenses:
7. Variable:
8. 14,400 units × $104 per unit $1,497,600.00 $1,497,600.00
9. 21,600 units × $193* per unit $4,168,800.00 4,168,800.00
10. Fixed 200,000.00 520,000.00 720,000.00
11. Total expenses $1,697,600.00 $4,688,800.00 $6,386,400.00
12. Income from operations $376,000.00 $1,251,200.00 $1,627,200.00
*$150 of the $193 per unit represents materials costs, and the remaining $43 per unit represents other variable conversion expenses incurred within the Commercial Division. The Consumer Division is presently producing 14,400 units out of a total capacity of 17,280 units. Materials used in producing the Commercial Division’s product are currently purchased from outside suppliers at a price of $150 per unit. The Consumer Division is able to produce the materials used by the Commercial Division. Except for the possible transfer of materials between divisions, no changes are expected in sales and expenses. Required:1. Would the market price of $150 per unit be an appropriate transfer price for Garcon Inc.? Explain.2. If the Commercial Division purchases 2,880 units from the Consumer Division, rather than externally, at a negotiated transfer price of $115 per unit, how much would the income from operations of each division and the total company income from operations increase?3. Prepare condensed divisional income statements for Garcon Inc. based on the data in Requirement 2.4. If a transfer price of $126 per unit is negotiated, how much would the income from operations of each division and the total company income from operations increase?
Answers: 3
Other questions on the subject: Business
Business, 22.06.2019 00:00, billey32
Exercise 4-6 the following balances were taken from the books of alonzo corp. on december 31, 2017. interest revenue $86,000 accumulated depreciation—equipment $40,000 cash 51,000 accumulated depreciation—buildings 28,000 sales revenue 1,380,000 notes receivable 155,000 accounts receivable 150,000 selling expenses 194,000 prepaid insurance 20,000 accounts payable 170,000 sales returns and allowances 150,000 bonds payable 100,000 allowance for doubtful accounts 7,000 administrative and general expenses 97,000 sales discounts 45,000 accrued liabilities 32,000 land 100,000 interest expense 60,000 equipment 200,000 notes payable 100,000 buildings 140,000 loss from earthquake damage 150,000 cost of goods sold 621,000 common stock 500,000 retained earnings 21,000 assume the total effective tax rate on all items is 34%. prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (round earnings per share to 2 decimal places, e. g. 1.48.)
Answers: 2
Business, 22.06.2019 07:30, davidleew24
Jewelry manufacturers produce a range of products such as rings, necklaces, bracelets, and brooches. what fundamental economic question are they addressing by offering this range of items?
Answers: 3
Business, 22.06.2019 13:20, ooEVAoo
Suppose farmer lane grows and sells cotton in a perfectly competitive industry. the market price of cotton is $1.64 per kilogram, and his marginal cost of production is $1.44 per kilogram, which increases with output. assume farmer lane is currently earning a profit. can farmer lane do anything to increase his profit in the short run? farmer lane: a. cannot do anything to increase his profit. b. may or may not be able to increase his profit. c. can increase his profit by raising his price. d. can increase his profit by producing more output. e. can increase his profit by shutting down.
Answers: 1
Business, 22.06.2019 18:50, lordcaos066
Plastic and steel are substitutes in the production of body panels for certain automobiles. if the price of plastic increases, with other things remaining the same, we would expect: a) the demand curve for plastic to shift to the left. b) the price of steel to fall. c) the demand curve for steel to shift to the left d) nothing to happen to steel because it is only a substitute for plastic. e) the demand curve for steel to shift to the right
Answers: 3
You know the right answer?
Garcon Inc. manufactures electronic products, with two operating divisions, Consumer and Commercial....
Questions in other subjects:
Law, 23.10.2019 01:00
Computers and Technology, 23.10.2019 01:00
English, 23.10.2019 01:00
Mathematics, 23.10.2019 01:00
