Atascadero Industries operates a Manufacturing Division and a Marketing Division. Both divisions are evaluated as profit centers.Marketing buys products from Manufacturing and packages them for sale. Manufacturing sells many components to third parties inaddition to Marketing. Selected data from the two operations follow.Capacity (units)Sales priceVariable costsFixed costsManufacturing1,070,0001,750630$$a. Transfer priceb. Transfer price$10,700,000a For Manufacturing, this is the price to third parties.b For Marketing, this does not include the transfer price paid to Manufacturing.Marketing507,000$ 4,900$ 1,820$7,270,000Required:a. Current production levels in Manufacturing are 607,000 units. Marketing requests an additional 107,000 units to produce a specialorder. What transfer price would you recommend?b. Suppose Manufacturing is operating at full capacity. What transfer price would you recommend?per unitper unit

Name: Atascadero Industries operates a Manufacturing Division and a Marketi
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Description: Atascadero Industries operates a Manufacturing Division and a Marketing Division. Both divisions are evaluated as profit centers.Marketing buys products from Manufacturing and packages them for sale. Manufacturing sells many components to third part

These are the accounting transactions that are having a monetary impact on the financial statement…

Answered: Required: a. Current production levels…

Business

Accounting

Required: a. Current production levels in Manufacturing are 607,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 22BEB: Calculating Transfer Price Teslum Inc. has a number of divisions, including the Machina Division, a...

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Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $12. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the cost-based transfer price? Variable cost per unit $7.48 • Fixed cost per unit 1.97 • Division B sales price of Component X 14.50
Atascadero Industries operates a Manufacturing Division and a Marketing Division. Both divisions are evaluated as profit centers. Marketing buys products from Manufacturing and packages them for sale. Manufacturing sells many components to third parties in addition to Marketing. Selected data from the two operations follow. Manufacturing Marketing 1,020,000 %24 Capacity (units) sales price variable costs Fixed costs 502,000 1,500 4,650 $4 580 1,720 $10,200, 000 $7,220, 000 a. For Manufacturing, this is the price to third partles. For Marketing, this does not include the transfer price paid to Manufacturing. Suppose Manufacturing is located in Country X with a tax rate of 70 percent and Marketing in Country Y with a tax rate of 30 percent. All other facts remain the same, Requlred: a. Current production levels in Manufacturing are 520,000 units. Marketing requests an additional 120.000 units to produce a speclal order. What transfer price would youu recommend? b. Suppose Manufacturing…
Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $12. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the full-cost-based transfer price? • Variable cost per unit $6.69 Fixed cost per unit 1.47 . Division B sales price of Component X 14,50
San Jose Company operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles them for sale. Manufacturing sells many components to third parties in addition to Assembly. Selected data from the two operations follow. Manufacturing Assembly Capacity (units) 400,000 200,000 Sales pricea $ 400 $ 1,300 Variable costsb $ 160 $ 480 Fixed costs $ 40,000,000 $ 24,000,000 a For Manufacturing, this is the price to third parties. b For Assembly, this does not include the transfer price paid to Manufacturing. Suppose Manufacturing is located in Country A with a tax rate of 60 percent and Assembly in Country B with a tax rate of 40 percent. All other facts remain the same. Required: a. Current production levels in Manufacturing are 200,000 units. Assembly requests an additional 40,000 units to produce a special order. What transfer price would you…