How much would Eagle Company operating income increase

Assignment Help Managerial Accounting
Reference no: EM132766494

Problem - Transfer Pricing - The materials used by the South Division of Eagle Company are currently purchased from outside suppliers at $30 per unit. These same materials are produced by Eagle's North Division. Operating income assuming no transfers between divisions is $1,200,000 for the North Division and $1,360,000 for the South Division.

The North Division has unused capacity and can produce the materials needed by the South Division at a variable cost of $15 per unit. The two divisions have recently negotiated a transfer price of $22 per unit for 30,000 units.

Based on the agreed upon transfer price, with no reduction in the North Division's current sales:

a. How much would the North Division's operating income increase?

b. How much would the South Division's operating income increase?

c. How much would Eagle Company's operating income increase?

Reference no: EM132766494

Questions Cloud

Describe the teaching experience of educating people : In 1,500-2,000 words, describe the teaching experience of educating people in community about COVID-19 virus, and discuss your observations of your audience.
What is division a operating income : If the Accounts Payable Department is treated as a support department, what is Division A's operating income
How does demographic and psychographic profile differ : Do you ever try to "keep up with the Joneses" (meaning that you try to buy things that make you fit in with your colleagues, friends and family)?
Research an advanced nursing practice role : Focusing on the specialty for which you were admitted to South University, select an advanced nursing role to research. (It must be one offered by South.
How much would Eagle Company operating income increase : The two divisions have recently negotiated a transfer price of $22 per unit for 30,000 units. How much would Eagle Company operating income increase
How do articles support the nurse practice issue you chose : How do these two articles support the nurse practice issue you chose? Discuss how these two articles will be used to answer your PICOT question.
What are three main characteristics of big data : Big data has been evolving tremendously for the past several years. What are the three main characteristics of big data?
Determine the skills that relative to the seven dimensions : Determine the skills, strengths, or qualities that you possess, relative to the seven dimensions of the Global Leadership and Organizational Behavior
Discuss between servant vs other leadership models : Discuss the most significant differences between servant leadership models and other leadership models. Be sure to include specific examples

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd