The Alberto Division of Imperial Ltd. had the following operating results last year: Sales (units) 90,000 £ Sales (£s) 36,000 Variable expenses 22,500 Contribution 13,500 Fixed Costs 8,400 Profit 5,100 Alberto expects identical operating results this year. The Alberto Division has the ability to produce and sell 180,000 components annually. Question 14 Assume now that the Alberto Division is currently operating at an activity of 160,000 components. Also assume again that the Cesar Division wants to purchase an additional 22,000 components from Alberto. Under these conditions, what amount per component (to 2 decimal places) would Alberto have to charge Cesar in order to maintain its current profit? A) £0.24 B) I do not wish to answer this question. C) £0.26 D) £0.50 E) £0.16 F) £0.22
The Alberto Division of Imperial Ltd. had the following operating results last year: Sales (units) 90,000 £ Sales (£s) 36,000 Variable expenses 22,500 Contribution 13,500 Fixed Costs 8,400 Profit 5,100 Alberto expects identical operating results this year. The Alberto Division has the ability to produce and sell 180,000 components annually. Question 14 Assume now that the Alberto Division is currently operating at an activity of 160,000 components. Also assume again that the Cesar Division wants to purchase an additional 22,000 components from Alberto. Under these conditions, what amount per component (to 2 decimal places) would Alberto have to charge Cesar in order to maintain its current profit? A) £0.24 B) I do not wish to answer this question. C) £0.26 D) £0.50 E) £0.16 F) £0.22
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 14MC: A company produces two products. E and F in batches of 100 units. The production and cost data are:...
Related questions
Question
The Alberto Division of Imperial Ltd. had the following operating results last year:
Sales (units) |
90,000 |
£ |
|
Sales (£s) |
36,000 |
Variable expenses |
22,500 |
Contribution |
13,500 |
Fixed Costs |
8,400 |
Profit |
5,100 |
Alberto expects identical operating results this year. The Alberto Division has the ability to produce and sell 180,000 components annually.
Question 14
Assume now that the Alberto Division is currently operating at an activity of 160,000 components. Also assume again that the Cesar Division wants to purchase an additional 22,000 components from Alberto. Under these conditions, what amount per component (to 2 decimal places) would Alberto have to charge Cesar in order to maintain its current profit?
- A) £0.24
- B) I do not wish to answer this question.
- C) £0.26
- D) £0.50
- E) £0.16
- F) £0.22
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