The machining division has a capacity of 4,300 units. Its sales and cost data are: Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Total fixed manufacturing overhead (a) Minimum transfer price $ $161 Save for Later 54 11 The machining division currently sells 1,600 units to outside customers, and the assembly division wants to purchase 900 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, not $11/unit. What should be the transfer price in order not to affect its current profit? 110,200 Attempts: 0 of 1 used Submit Answer

The machining division has a capacity of 4,300 units. Its sales and cost data are: Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Total fixed manufacturing overhead (a) Minimum transfer price $ $161 Save for Later 54 11 The machining division currently sells 1,600 units to outside customers, and the assembly division wants to purchase 900 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, not $11/unit. What should be the transfer price in order not to affect its current profit? 110,200 Attempts: 0 of 1 used Submit Answer

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 5EB: Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following...

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Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins of 300 and 600, respectively. Assume initially that Patz can sell all that is produced of either component. Part A requires two hours of assembly, and B requires five hours of assembly. The firm has 300 assembly hours per week. Required: 1. Express the objective of maximizing the total contribution margin subject to the assembly-hour constraint. 2. Identify the optimal amount that should be produced of each machine part and the total contribution margin associated with this mix. 3. What if market conditions are such that Patz can sell at most 75 units of Part A and 60 units of Part B? Express the objective function with its associated constraints for this case and identify the optimal mix and its associated total contribution margin.
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The machining division of Cullumber International has a capacity of 2.480 units. Its sales and cost data are: Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Total fixed manufacturing overhead $ Minimum transfer price $ 85 30 7 213,700 The machining division is currently selling 2.280 units to outside customers, and the assembly division of Cullumber International wants to purchase 400 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, and not $7/unit. What should be the transfer price in order not to affect the machining division's current profit? (Round answer to 2 decimal places eg. 5.25.)