User Account

All Pages

How would intercompany sales affect Division B

Assignment Help Accounting Basics
Reference no: EM131775085

Problem - ACME Inc. manufactures electronics and it consists of several divisions.

Division A wants to purchase materials from Division B at a price of $85 per unit.

Division B can produce 25,000 units at full capacity, and is currently operating at 90% capacity with a variable cost of $80 per unit.

Division B currently sells only to outside customers who pay $115 per unit.

Division A pays an outside company $110 per unit.

If purchased from Division B, B's variable costs would be $10 less because it saves on marketing expenses.

Division A requires 10,000 units.

How would Division B selling to Division A affect Division A's purchasing costs?

How would intercompany sales affect Division B?

What solution would be best for ACME Inc., assuming Division B has the ability to operate at full capacity?

(In other words, where should the divisions purchase from to maximize their profit?

Reference no: EM131775085

Questions Cloud

Identify and evaluate any additional information : Identify and evaluate any additional information that managers need to consider before accepting or rejecting this contract
Residual income and balanced scorecards : Discuss and calculate various performance measures used by management such as ROI, residual income and balanced scorecards
Create a personal resume building tool : Create a personal resume building tool. Form elements will be used to accept user input which will be assigned to variables
Total quality management principles to resolve the issue : Identify whether you would recommend using Six Sigma, Lean, or Total Quality Management principles to resolve the issue.
How would intercompany sales affect Division B : If purchased from Division B, B's variable costs would be $10 less because it saves on marketing expenses. How would intercompany sales affect Division B
The amount of coronado companys inventory : The amount of Coronado Companys inventory, Coronado Company follows the practice of pricing its inventory at the lower-of-cost-or-market
Interview the manager of a restaurant : Interview the manager of a restaurant. Does the restaurant make or buy soups and deserts?
Explore the tags and structure of the html : Explore the tags and structure of the HTML. Using a text editor such as Notepad or Text-edit (not Dreamweaver), you will create basic HTML document
What internal control features exist in a petty cash fund : Winningham Company maintains a petty cash fund for small expenditures. What internal control features exist in a petty cash fund

Reviews

Write a Review

Accounting Basics Questions & Answers

  Compare abc costing and traditional costing methods

Compare ABC costing and traditional costing methods, giving examples. Which system provides a more accurate picture of cost incurred to produce the jobs?

  Nordstrom company reported net income of 195000 for 2011

nordstrom company reported net income of 195000 for 2011. nordstrom also reported depreciation expense of 45000 and a

  Schedule of activity costs quality control activities

schedule of activity costs quality control activities activity cost process audits 55000 training of machine operators

  Estimate salvage value at the end of the recovery period

A piece of equipment is purchased for $40,000 and has an estimated salvage value of $1,000 at the end of the recovery period. Prepare a depreciation schedule.

  Surfs up makes surfboards from balsam wood standards for

surfs up makes surfboards from balsam wood. standards for one surfboard are 6.8 board feet of balsam at a cost of 6.20

  Suppose a manufacturer incurs 2000000 hours of direct

assume a manufacturer incurs 2000000 hours of direct productive labor in a year at a total direct labor cost of

  At the beginning of the current fiscal year the balance

at the beginning of the current fiscal year the balance sheet of cummings co. showed liabilities of 219000. during the

  Prepare the journal entries to record the deferred

Management has determined that they should record a valuation allowance equal to the net deferred tax asset. Assuming a tax rate of 34%, prepare the journal entries to record the deferred tax provision and the valuation allowance.

  What is the per unit conversion cost

Complete as to materials and 40% complete as to conversion costs. If the unit cost of materials is $3 and the costs assigned to the 800 units is $6,000, what is the per unit conversion cost?

  How does lean manufacturing reduces scrap waste and

1.what is lean accounting?2.what are some advantages and disadvantags3.what are some issuess accountants face when

  Compute the april inventory and april cost of goods sold

Amsterdam Company uses a periodic inventory system. For April, when the company sold 600 units - Compute the April 30 inventory and the April cost of goods sold using the average cost method.

  Determine the return on total assets

A company reports the following income statement and balance sheet information for the current year: Determine the return on total assets

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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