How much would the operating income of division b increase

Assignment Help Accounting Basics
Reference no: EM132426778

Question - Materials used by Ford Company in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit. However, the same materials are available from Division B. Division B has unused capacity and can produce the materials needed by Division A at a variable cost of $20 per unit.

a. If a transfer price of $25 per unit is established and 60,000 units of material are transferred with no reductions in Division B's current sales, how much would Ford Company's total operating income increase?

b. How much would the operating income of Division A increase?

c. How much would the operating income of Division B increase?

d. If the negotiated price approach is used, what would be the range of acceptable transfer prices? Round your answer to two decimal places.

Reference no: EM132426778

Questions Cloud

How transactions affect the statement of cash flows : How do these transactions affect the statement of cash flows using the indirect method? They're all separate transactions
Explore way that can use evidence-based management principle : Explore ways that you can use evidence-based management principles and processes as a change manager.Specify the value of EBMgt in change management.
How is copyright a valuable asset in business : Question - Intellectual Property: Application, Protection and Commercial Value. How is copyright a valuable asset in business
Is blockchain here to stay why or why not : Why are FinTech start-ups struggling to compete alone and instead turning to collaboration with incumbent financial services firms?
How much would the operating income of division b increase : How much would the operating income of Division A increase? How much would the operating income of Division B increase
Review problem based on contemporary popular music : Why might this have been the case? Do you feel that contemporary popular music also focuses on escapist themes like the 1920s and 1930s or do you feel.
What is the contribution margin ratio : Question - If sales are $815,000, variable costs are 79% of sales, and operating income is $262,000, what is the contribution margin ratio
Compare status of women in islamic and roman societies : Compare the status of women in Islamic and Roman societies. Issues that you may want to keep in mind include family roles, legal status, property ownership.
What effect dividend have on Turner financial statements : Question - Turner Company owns 10% of the outstanding stock of ICA Company. What effect did this dividend have on Turner's 2021 financial statements

Reviews

Write a Review

Accounting Basics Questions & Answers

  Explain the tax advantage of allocating too much to building

Western Bank & Trust purchased land and a building for the lump sum of $3,000,000. Explain the tax advantage of allocating too much to the building

  Calculate the relative and cumulative frequencies

Calculate the relative and cumulative frequencies for each classification - What is the probability you would have to spend less than $3.50 for a pound of ground meat and what is the probability that you would have to spend more than $4.50 for a poun..

  Corporate financial statements-income statement

Explain why an audit of corporate financial statements-Income Statement, Capital Statement, Income Statement, and Statement of Cash Flows-is important to individuals who use those financial statements to make investment decisions and/or lending d..

  Prepare a schedule computing the net cash flow

Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows: using the indirect method

  Describe how to make 50 ml of the following 10x gel

describe how to make 50 ml of the following 10x gel electrophoresis loading buffer 100 mm edta ph 8.0 0.1 wv

  How is anything related to intangibles would appear

How is anything related to intangibles would appear on the balance sheet and income statement on a comparative basis for 2016, 2015, and 2014?

  Discuss the total obligation under capital leases

the amount that should be reported by Smith Corporation as the total obligation under capital leases

  What is the total consideration transferred by allfoods

What is the total consideration transferred by Allfoods in the acquisition of Baked Beans

  What is the impact of this transaction

The credit card company charges a 2% fee. What is the impact of this transaction on net operating income

  Prepare a direct materials budget for musk oil

Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount of purchases

  Compute the current ratio and current cash debt coverage

Compute the current ratio, current cash debt coverage , accounts receivable turnover, average collection period, inventory turnover

  Describe the differences that exist in current accounting

Describe the differences that exist in current accounting for original proceeds of the issuance of convertible bonds and of debt instruments

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