How much would division income from operations increase

Assignment Help Financial Accounting

Reference no: EM13137255

Materials used by Aro-Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales.

How much would Division 6's income from operations increase?

Reference no: EM13137255

Questions Cloud

What is the sunk cost in this situation : Wilson Company is considering replacing equipment which originally cost $500,000 and which has $460,000 accumulated depreciation to date. A new machine will cost $790,000. What is the sunk cost in this situation?

Leon festinger''s (1957) original formulation of dissonance : What did Leon Festinger's (1957) original formulation of dissonance theory posit? Be sure to address what dissonance is, how and when it arises, and what people do to reduce it.

Type of probability distribution likely to count chips : Particular cookie will have fewer than 5. What type of probability distribution will most likely be used to analyze the number of chocolate chips per cookie?

Issues in american fiscal policy : During recent political campaigns, taxes and budget policy were key issues. White House budget packages are often designed to stimulate economic growth.

How much would division income from operations increase : A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. How much would Division 6's income from operations increase?

What are the combined total department costs : Premium Corporation has two service departments whose direct department costs are $75,000 and $10,000, respectively, and two producing departments whose direct department costs are $60,000 and $250,000, respectively. What are the combined total de..

What is the amount of the debit to retained earnings : The market price of Howell's common stock was $35 on August 1, 2010, and $38 on September 15, 2010. What is the amount of the debit to retained earnings as a result of the declaration and distribution of this stock dividend?

Outcome of the american policy : The UN Charter states that nations may act alone in using force only in self-defense. Is an American attack on Iraq justifiable as self-deffense? Could the strategy of deterrence no longer be relevant to world conditions?

Calculate and graph the average total cost : Calculate what would be the minimum annual vehicle use in km/year that would justify the choice of a diesel engine car over the petrol version? Does this correspond to your answer to 4) above?

User Account

All Pages