Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. B Sales $23,000 $52,000 Cost of goods sold 11,040 27,560 Gross profit $11,960 $24,440 Utility expenses 1,380 3,640 Wages expense 5,980 10,920 Costs allocated from corporate 2,530 15,080 Total expenses $9,890 $29,640 Operating income/(loss) in dollars $2,070 -$5,200 Operating income/(loss) in percentage 9 % -10 % Assume the market price for the items your department purchase is 15% below what you are being charged by department Aof Marley's Manufacturing. Determine the operating income for department B, assuming department A "sold" department B 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place. New operating income/(loss) for department B in dollars New operating income/(loss) for department B in percentage %

Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. B Sales $23,000 $52,000 Cost of goods sold 11,040 27,560 Gross profit $11,960 $24,440 Utility expenses 1,380 3,640 Wages expense 5,980 10,920 Costs allocated from corporate 2,530 15,080 Total expenses $9,890 $29,640 Operating income/(loss) in dollars $2,070 -$5,200 Operating income/(loss) in percentage 9 % -10 % Assume the market price for the items your department purchase is 15% below what you are being charged by department Aof Marley's Manufacturing. Determine the operating income for department B, assuming department A "sold" department B 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place. New operating income/(loss) for department B in dollars New operating income/(loss) for department B in percentage %

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 5EA: Assume you are the department B manager for Marleys Manufacturing. Marleys operates under a...

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Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.
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