--/1Question 15esView PoliciestionsCurrent Attempt in ProgressUS SupportThe Heating Division of Kobe International produces a heatingelement that it sells to its customers for $44 per unit. Its variablecost per unit is $25, and its fixed cost per unit is $12. Topmanagement of Kobe International would like the Heating Divisionto transfer 14,600 heating units to another division within thecompany at a price of $30. The Heating Division is operating at fullcapacity. What is the minimum transfer price that the HeatingDivision should accept?tral65Minimum transfer price$8:48 PM49)11/18/2019Chpfofninsprt scf124homedeleteendpg up9numbackspacelock78

Calculate the opportunity cost (contribution margin).

Answered: --/1 Question 15 es View Policies tions…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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QS 22-17B Determining transfer prices with excess capacity LO C2 The Windshield division of Fast Car Co. makes windshields for use in Fast Car’s Assembly division. The Windshield division incurs variable costs of $200 per windshield and has capacity to make 500,000 windshields per year. The market price is $450 per windshield. The Windshield division incurs total fixed costs of $3,000,000 per year.If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between the Windshield and Assembly divisions?
eBook Problem 19-02 The management of a firm wants to introduce a new product. The product will sell for $5 a unit and can be produced by either of two scales of operation. In the first, total costs are TC = $3,000 + $3.1Q. In the second scale of operation, total costs are TC = $4,520 + $2.7Q. What is the break-even level of output for each scale of operation? Round your answers to the nearest whole number. The first scale of operation: units The second scale of operation: units What will be the firm’s profits for each scale of operation if sales reach 3,800 units? Round your answers to the nearest dollar. The first scale of operation: $ The second scale of operation: $ One-half of the fixed costs are noncash (depreciation). All other expenses are for cash. If sales are 1,100 units, will cash receipts cover cash expenses for each scale of operation? Enter your answers as positive values. Round your answers to the nearest dollar. The first scale of operation generates a cash…
Question 9.4 East Meets West Ltd. is a Canadian company with a fully owned subsidiary in the UK. The UK subsidiary produces a component for off shore gas compressors that are sold in Canada. The components have a variable cost of 1,700 Euros and a full cost of 2,100 Euros. The 2,000 components required can be purchased in Canada for $3,500. Assume the minimum transfer price allowed by the Canadian tax authorities is the variable cost and the maximum is the market value. Also assume operating income in each country is equal to taxable income. One Euro is worth $1.45 Canadian. The marginal tax rate in Canada is 25% and in Ireland 12.5%. Required: What transfer price should be set for East Meets West Ltd. to minimize its total income taxes? Show your calculations. If East Meets West Ltd. desires to minimize its total income taxes, calculate the amount of tax liability in each country in Canadian dollars.
M3
Question 2 Kosova Itd is a new formed firm which intends to penetrate in the international market. The newly formed firm produces car radios, which currently it sells to car manufacturers for £60 each. Next year the business plans to make and sell 20,000 radios. The business's costs are as follows: Manufacturing Variable materials £20 per radio £14 per radio £12 per radio Variable labour Other variable costs Fixed cost £80,000 per year Administration and selling Variable £3 per radio £60,000 per year Fixed Required: (a) Calculate the break-even point for next year, expressed both in quantity of radios and sales value. (b) Calculate the operating leverage for next year, and discuss why operating leverage is useful. value.
QUESTION-5 Megabyte Inc. of France and R Ltd. of India are associated enterprises. R Ltd. imports 3,000 compressors for Air Conditioners from Megabyte Inc. at 7,500 per unit and these are sold to Pleasure Cooling Solutions Ltd at a price of 11,000 per unit. R Ltd. had also imported similar products from Cold Inc. Poland and sold outside at a Gross Profit of 20% on Sales. Megabyte Inc. offered a quantity discount of 1,500 per unit. Cold Inc. could offer only 500 per unit as Quantity Discount. The freight and customs duty paid for imports from Cold Inc. Poland had cost R Ltd. 1,200 per piece. In respect of purchase from Cold Inc., R Ltd. had to pay ₹ 200 only as freight charges. Determine the Arm's Length Price and the amount of increase in Total Income of R Ltd.
Return to question Lost Mine has offered to buy 3,100 of the US umbrellas at a price of $32 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost $13.00 7.00 9.00 2.50 $31.50 $40.00 Regular. sales price Required: 1. Compute the incremental profit (or loss) from accepting the special order. 2. Should Mohave accept the special order? 3. Suppose that the special order had been to purchase 3,600 umbrellas får $28.00 each. Recompute the incremental profit (or loss) from accepting the special order under this scenario. 4. Assume that Mohave is operating at full capacity. Calculate the special-order price per unit at which Mohave would be indifferent between accepting or rejecting the special order. X Answer is complete but not entirely correct. Complete this question by entering your answers in…
Q.23 HM motors is considering eliminating its mountain bike division, which reported an operating loss for the recent year of P3,000. The division sales for the year = P1,050,000, variable costs = P860,000 Fixed costs of the division =P193,000 If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: a.57,900 decrease b.132,100 decrease c.54,900 decrease d.190,000 increase
I need the answer as soon as possible
Exercise 23-10 (Algo) Keep or replace LO P5 Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $49,000 and a remaining useful life of five years. It can be sold now for $59,000. Variable manufacturing costs are $49,000 per year for this old machine, Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years. Purchase price Variable manufacturing costs per year (a) Compute the income increase or decrease from replacing the old machine with Machine A (b) Compute the income increase or decrease from replacing the old machine with Machine B. (c) Should Lopez keep or replace its old machine? (d) if the machine should be replaced, which new machine should Lopez purchase? Req A Complete this question by entering your answers in the tabs below. Revenues Machine A: Keep or Replace Analysis Req B Compute the income increase or decrease from replacing the old machine…
Question 2 In Bradford Ltd, there are two divisions: Transportation and Refining Divisions. The below is relevant information: 1. Transportation Division: The purchase price of crude oil from fields under a long-term contract is £13 per barrel, and Transportation Division purchases crude oil in the North Sea and also transports the crude oil to London. Other costs: Variable costs per barrel of crude oil £2 Fixed costs per barrel of crude oil £3 Total £5 The pipeline from the North Sea to London can carry 35,000 barrels of crude oil per day. 2. Refining Division: The external purchase price of crude oil from outside suppliers is £23 per barrel. The Refining Division is buying 20,000 barrels a day from the…
Question 2 Pisang Berhad produces 500,000 switches per year with the following costs: (For the production of 500,000 switches) RM Direct materials 1,000,000 Direct labour 750,000 Variable manufacturing expenses 300,000 450,000 Fixed manufacturing expenses Total cost 2,500,000 RM5/unit Cost/per unit RM2,500,000/500,000 units + A supplier has approached the company, and offered the switches at RM4 per unit. Should the company decided to purchase from the supplier, the company need to employ an incoming quality controller with a salary of RM70,000 per annum. Other than this, all the other fixed manufacturing expenses will remain unchanged. Required: a) Should Pisang Berhad continue with the production of switches internally, or to purchase the switches from the external supplier? Support your answer with appropriate calculations. b) Will your answer change if the facilities freed up by the company can be used to do alternative works that will contribute an annual profit of RM50,000? Why?…

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