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doro Division of Calapan industries manufactures furniture. Data on a sofa the division makes follows: Selling price per unit Variable cost per unit: Fabric P175 Other Variable Cost 400 Contribution Margin P 900 P 575 P325 ===== Mindoro buys the fabric from an outside supplier. The manager of Mindoro learns that Mactar Division of Calapan Industries makes a fabric that meets her requirements. Mactan sells the fabric to outside customers for P200. Variable cost to Mactan is P125. Mindoro's manager offers to buy the fabric at P150. Required: 1. Assuming Mactan Division has plenty of capacity to serve its outside customers and meet Mindoro's needs. If Mindoro buys 2,000 units from Mactan at P150. a. What would happen to the income of Mactan Division? b. What would happen to the income of Mindoro Division? c. What would happen to the income of Calapan Industries?

doro Division of Calapan industries manufactures furniture. Data on a sofa the division makes follows: Selling price per unit Variable cost per unit: Fabric P175 Other Variable Cost 400 Contribution Margin P 900 P 575 P325 ===== Mindoro buys the fabric from an outside supplier. The manager of Mindoro learns that Mactar Division of Calapan Industries makes a fabric that meets her requirements. Mactan sells the fabric to outside customers for P200. Variable cost to Mactan is P125. Mindoro's manager offers to buy the fabric at P150. Required: 1. Assuming Mactan Division has plenty of capacity to serve its outside customers and meet Mindoro's needs. If Mindoro buys 2,000 units from Mactan at P150. a. What would happen to the income of Mactan Division? b. What would happen to the income of Mindoro Division? c. What would happen to the income of Calapan Industries?

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 8PB: Colin OShea has a carpentry shop that employs 4 carpenters. Colin received an order for 1,000 coffee...
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Mindoro Division of Calapan Industries manufactures furniture. Data on a sofa the division makes follows: Selling price per unit Variable cost per unit: Fabric P175 Other Variable Cost 400 Contribution Margin P 900 P 575 P325 ===== Mindoro buys the fabric from an outside supplier. The manager of Mindoro learns that Mactan Division of Calapan Industries makes a fabric that meets her requirements. Mactan sells the fabric to outside customers for P200. Variable cost to Mactan is P125. Mindoro's manager offers to buy the fabric at P150. Required: 1. Assuming Mactan Division has plenty of capacity to serve its outside customers and meet Mindoro's needs. If Mindoro buys 2,000 units from Mactan at P150. a. What would happen to the income of Mactan Division? b. What would happen to the income of Mindoro Division? c. What would happen to the income of Calapan Industries?
Transcribed Image Text:Mindoro Division of Calapan Industries manufactures furniture. Data on a sofa the division makes follows: Selling price per unit Variable cost per unit: Fabric P175 Other Variable Cost 400 Contribution Margin P 900 P 575 P325 ===== Mindoro buys the fabric from an outside supplier. The manager of Mindoro learns that Mactan Division of Calapan Industries makes a fabric that meets her requirements. Mactan sells the fabric to outside customers for P200. Variable cost to Mactan is P125. Mindoro's manager offers to buy the fabric at P150. Required: 1. Assuming Mactan Division has plenty of capacity to serve its outside customers and meet Mindoro's needs. If Mindoro buys 2,000 units from Mactan at P150. a. What would happen to the income of Mactan Division? b. What would happen to the income of Mindoro Division? c. What would happen to the income of Calapan Industries?
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