Homework Help is Here – Start Your Trial Now!
Business
Accounting
Division A manufactures electronic circuit boards that can be sold to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: 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 $ 189 $ 117 20,900 14,500 6,400 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 $290 In additional variable cost per Instrument and then sold the Instruments for $650 each. Required: 1. Calculate the net operating Incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,900 circuit boards. Next year, Division B wants to purchase 7,400 circuit boards from Division A rather than 6,400. (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 selling 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. Sales Expenses: Added by the division Transfer price paid Total expenses Net operating income Division A Division B Total Company < Required 1 Required 2 >

Division A manufactures electronic circuit boards that can be sold to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: 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 $ 189 $ 117 20,900 14,500 6,400 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 $290 In additional variable cost per Instrument and then sold the Instruments for $650 each. Required: 1. Calculate the net operating Incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,900 circuit boards. Next year, Division B wants to purchase 7,400 circuit boards from Division A rather than 6,400. (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 selling 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. Sales Expenses: Added by the division Transfer price paid Total expenses Net operating income Division A Division B Total Company < Required 1 Required 2 >

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...
See similar textbooks
icon
Related questions
Question
Division A manufactures electronic circuit boards that can be sold to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: 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 $ 189 $ 117 20,900 14,500 6,400 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 $290 In additional variable cost per Instrument and then sold the Instruments for $650 each. Required: 1. Calculate the net operating Incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,900 circuit boards. Next year, Division B wants to purchase 7,400 circuit boards from Division A rather than 6,400. (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 selling 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. Sales Expenses: Added by the division Transfer price paid Total expenses Net operating income Division A Division B Total Company < Required 1 Required 2 >
Transcribed Image Text:Division A manufactures electronic circuit boards that can be sold to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: 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 $ 189 $ 117 20,900 14,500 6,400 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 $290 In additional variable cost per Instrument and then sold the Instruments for $650 each. Required: 1. Calculate the net operating Incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,900 circuit boards. Next year, Division B wants to purchase 7,400 circuit boards from Division A rather than 6,400. (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 selling 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. Sales Expenses: Added by the division Transfer price paid Total expenses Net operating income Division A Division B Total Company < Required 1 Required 2 >
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
steps

Unlock instant AI solutions

Tap the button
to generate a solution

SEE SOLUTION
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS