Assume, for this question only, that the Computer Chip Division is selling all that it can produce to external buyers for P50 per unit. How would overall corporate profits be affected if it sells 4,000 units to the Computer Division at P45? (Assume that the Computer Division can purchase the super chip from an outside supplier for P45.) * Computer Solutions Corporation manufactures and sells various high-tech office automation products. Two divisions of Computer Solutions Corporation are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a "super chip," that can be used by both the Computer Division and other external customers. The following information is available on this month's operations in the Computer Chip Division: Selling price per chip Variable costs per chip Fixed production costs P50 P20 P60,000 P90,000 10,000 chips 6,000 chips O chips Fixed SG&A costs Monthly capacity External sales Internal sales Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead pays P45 to an external supplier for the 4,000 chips it needs each month. O no effect O 40,000 larger P20,000 increase O 20,000 decrease O 90,000 increase
Assume, for this question only, that the Computer Chip Division is selling all that it can produce to external buyers for P50 per unit. How would overall corporate profits be affected if it sells 4,000 units to the Computer Division at P45? (Assume that the Computer Division can purchase the super chip from an outside supplier for P45.) * Computer Solutions Corporation manufactures and sells various high-tech office automation products. Two divisions of Computer Solutions Corporation are the Computer Chip Division and the Computer Division. The Computer Chip Division manufactures one product, a "super chip," that can be used by both the Computer Division and other external customers. The following information is available on this month's operations in the Computer Chip Division: Selling price per chip Variable costs per chip Fixed production costs P50 P20 P60,000 P90,000 10,000 chips 6,000 chips O chips Fixed SG&A costs Monthly capacity External sales Internal sales Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead pays P45 to an external supplier for the 4,000 chips it needs each month. O no effect O 40,000 larger P20,000 increase O 20,000 decrease O 90,000 increase
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 17E: Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside...
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Transcribed Image Text:Assume, for this question only, that the Computer Chip Division is selling all
that it can produce to external buyers for P50 per unit. How would overall
corporate profits be affected if it sells 4,000 units to the Computer
Division at P45? (Assume that the Computer Division can purchase the
super chip from an outside supplier for P45.) *
Computer Solutions Corporation manufactures and sells various high-tech office automation products.
Two divisions of Computer Solutions Corporation are the Computer Chip Division and the Computer
Division. The Computer Chip Division manufactures one product, a "super chip." that can be used by
both the Computer Division and other external customers. The following information is available on this
month's operations in the Computer Chip Division:
Selling price per chip
Variable costs per chip
Fixed production costs
Fixed SG&A costs
Monthly capacity
External sales
P50
P20
P60,000
P90,000
10,000 chips
6,000 chips
O chips
Internal sales
Presently, the Computer Division purchases no chips from the Computer Chips Division, but instead
pays P45 to an external supplier for the 4,000 chips it needs each month.
no effect
O 40,000 larger P20,000 increase
20,000 decrease
90,000 increase
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