Managerial Accounting
Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
Question
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Chapter 10, Problem 6PB

(1)

To determine

Indicate whether the market price will be an appropriate transfer price for Company E.

(2)

To determine

Ascertain the increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(3)

To determine

Prepare the income statements for S and NS Divisions of Company E for the year ended December 31, 20Y8

(4)

To determine

Ascertain the increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

 (5) a

To determine

Ascertain the range of transfer price, if negotiated price approach is used

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Students have asked these similar questions
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: (refer to pic) 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?
Exoplex Industries Inc. is a diversified aerospace company, including two operating divisions, Semiconductors and Navigational Systems. Condensed divisional income statements, which involve no intracompany transfers and include a breakdown of expenses into variable and fixed components, are as follows: Exoplex Industries Inc.Divisional Income StatementsFor the Year Ended December 31, 20Y8   SemiconductorsDivision NavigationalSystemsDivision Total Sales:         2,240 units × $396 per unit   $887,040        $887,040          3,675 units × $590 per unit       $2,168,250    2,168,250              Total sales   $887,040    $2,168,250    $3,055,290  Expenses:     Variable:         2,240 units × $232 per unit   $(519,680)       $(519,680)         3,675 units × $472* per unit       $(1,734,600)   (1,734,600)     Fixed   (220,000)   (325,000)   (545,000)         Total expenses   $(739,680)   $(2,059,600)   $(2,799,280) Operating income   $147,360    $108,650…
Garcon Inc. manufactures electronic products, with two operating divisions, Consumer and Com- mercial. 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 Consumer Division Commercial Division Total Sales: 14,400 units x $144 per unit $ 2,073,600 $ 2,073,600 21,600 units x $275 per unit $ 5,940,000 5,940,000 $ 2,073,600 $ 5,940,000 $ 8,013,600 Total sales Expenses: Variable: 14,400 units x $104 per unit $(1,497,600) S(1,497,600) 21,600 units x $193" per unit $(4,168,800) (4,168,800) Fixed (200,000) (520,000) (720,000) Total expenses $(1,697,600) $(4,688,800) $(6,386,400) $ 376,000 $ 1,251,200 $ 1,627,200 Operating income *5150 ot the $193 per unit represents materials costs, and the remaining 543 per unit represents other variable conversion expenses incurred within the Commercial…

Chapter 10 Solutions

Managerial Accounting

Ch. 10 - Budgetary performance for cost center Vinton...Ch. 10 - Support department allocations The centralized...Ch. 10 - Prob. 3BECh. 10 - Profit margin, investment turnover, and ROI Briggs...Ch. 10 - Residual income The Commercial Division of Galena...Ch. 10 - Prob. 6BECh. 10 - Budget performance reports for cost centers...Ch. 10 - The following data were summarized from the...Ch. 10 - For each of the following support departments,...Ch. 10 - Prob. 4ECh. 10 - Service department charges In divisional income...Ch. 10 - Varney Corporation, a manufacturer of electronics...Ch. 10 - Horton Technology has two divisions, Consumer and...Ch. 10 - Rocky Mountain Airlines Inc. has two divisions...Ch. 10 - Championship Sports Inc. operates two divisionsthe...Ch. 10 - Prob. 10ECh. 10 - The operating income and the amount of invested...Ch. 10 - Prob. 12ECh. 10 - The condensed income statement for the Consumer...Ch. 10 - The Walt Disney Company (DIS) has four business...Ch. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Materials used by the Instrument Division of...Ch. 10 - Prob. 18ECh. 10 - GHT Tech Inc. sells electronics over the Internet....Ch. 10 - Profit center responsibility reporting for a...Ch. 10 - Prob. 3PACh. 10 - Effect of proposals on divisional performance A...Ch. 10 - Divisional performance analysis and evaluation The...Ch. 10 - Prob. 6PACh. 10 - Prob. 1PBCh. 10 - Prob. 2PBCh. 10 - Prob. 3PBCh. 10 - Prob. 4PBCh. 10 - Divisional performance analysis and evaluation The...Ch. 10 - Prob. 6PBCh. 10 - Prob. 1MADCh. 10 - Prob. 2MADCh. 10 - Papa Johns International, Inc. (PZZA), operates...Ch. 10 - Panera Bread Company (PNRA) operates over 2,000...Ch. 10 - Prob. 5MADCh. 10 - Prob. 1TIFCh. 10 - Prob. 2TIFCh. 10 - Prob. 3TIFCh. 10 - The three divisions of Yummy Foods are Snack...Ch. 10 - Prob. 5TIFCh. 10 - Prob. 1CMACh. 10 - Prob. 2CMACh. 10 - Prob. 3CMACh. 10 - Morrisons Plastics Division, a profit center,...
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