How much would the income from operation, Financial Accounting

Assignment Help:

Materials used by Company X in producing Division A's product are currently purchased from outside suppliers at a cost of $30 per unit. But 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 Company X's total income from operations increase?
b. How much would the income from operations of Division A increase?
c. How much would the income from operations of Division B increase?

d. If the negotiated price approach is used, what would be the range of acceptable transfer prices?

 


Related Discussions:- How much would the income from operation

consignment account, A of surat consigns goods to B of jaipur to be sold ...

A of surat consigns goods to B of jaipur to be sold at or above invoice price.B is entitled to get a commission of 8% on sales at invoice price plus 25% of any surplus price reali

Ed Mettway, Should Touring Enterprises consider liabilities as a part of it...

Should Touring Enterprises consider liabilities as a part of its permanent financing? Why or why not?n #Minimum 100 words accepted#

Horizontal analysis - total current liabilities, 1. Complete a horizontal a...

1. Complete a horizontal analysis using the dollar and percent change in the following items from the preceding year to the current year: (one typed page: use a table format with f

Conversion of members'' to creditors'' winding up-liquidation, Conversion o...

Conversion of members' to creditors' winding up If the liquidator in a members' winding up forms the opinion that the company will not be able to pay its debts in full within t

Equity shareholders, Equity shareholders, potential and present, seem prima...

Equity shareholders, potential and present, seem primarily to the company's record of earnings. They are thus interested in relationships as earnings per share or EPS and dividends

Maintaining a fixed interest rate, During summer of 2006, China increased t...

During summer of 2006, China increased their reserve requirement for the banking system while maintaining a fixed target for the interbank lending interest rate. Draw a graph of th

Risk and return - issue of debt, Q. Risk and Return - issue of debt? Ra...

Q. Risk and Return - issue of debt? Raising debt finance will raise the gearing and the financial risk of the company while raising equity finance will lower gearing and financ

Enumerate the characteristics of accounting information, Enumerate the char...

Enumerate the characteristics of accounting information Qualities, or characteristics, which have just been depicted would help us to decide whether accounting information is p

Renfro rentals has issued bonds, a) The actual risk-free rate is 3%, and in...

a) The actual risk-free rate is 3%, and inflation is usual to be 2% for the next 2 years. A 2-year Treasury security yields 6.7%. What is the maturity risk premium for the 2-year s

Partnership amalgamation, how to prepare the accounts when goodwill is not ...

how to prepare the accounts when goodwill is not to be maintained in the books

Write Your Message!

Captcha
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