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The Alberto Division of Imperial Ltd. had the following operating results last year: Sales (units) 90,000   £ Sales (£s) 36,000 Variable expenses 22,500 Contribution 13,500 Fixed Costs 8,400 Profit 5,100     Alberto expects identical operating results this year. The Alberto Division has the ability to produce and sell 180,000 components annually. Question 14 Assume now that the Alberto Division is currently operating at an activity of 160,000 components. Also assume again that the Cesar Division wants to purchase an additional 22,000 components from Alberto. Under these conditions, what amount per component (to 2 decimal places) would Alberto have to charge Cesar in order to maintain its current profit? A) £0.24 B) I do not wish to answer this question. C) £0.26 D) £0.50 E) £0.16 F) £0.22

The Alberto Division of Imperial Ltd. had the following operating results last year: Sales (units) 90,000   £ Sales (£s) 36,000 Variable expenses 22,500 Contribution 13,500 Fixed Costs 8,400 Profit 5,100     Alberto expects identical operating results this year. The Alberto Division has the ability to produce and sell 180,000 components annually. Question 14 Assume now that the Alberto Division is currently operating at an activity of 160,000 components. Also assume again that the Cesar Division wants to purchase an additional 22,000 components from Alberto. Under these conditions, what amount per component (to 2 decimal places) would Alberto have to charge Cesar in order to maintain its current profit? A) £0.24 B) I do not wish to answer this question. C) £0.26 D) £0.50 E) £0.16 F) £0.22

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 14MC: A company produces two products. E and F in batches of 100 units. The production and cost data are:...
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Question

The Alberto Division of Imperial Ltd. had the following operating results last year:

Sales (units)

90,000
 

£

Sales (£s)

36,000

Variable expenses

22,500

Contribution

13,500

Fixed Costs

8,400

Profit

5,100
   

Alberto expects identical operating results this year. The Alberto Division has the ability to produce and sell 180,000 components annually.

Question 14

Assume now that the Alberto Division is currently operating at an activity of 160,000 components. Also assume again that the Cesar Division wants to purchase an additional 22,000 components from Alberto. Under these conditions, what amount per component (to 2 decimal places) would Alberto have to charge Cesar in order to maintain its current profit?

  • A) £0.24
  • B) I do not wish to answer this question.
  • C) £0.26
  • D) £0.50
  • E) £0.16
  • F) £0.22
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