Answer #7 only gathered for the coming period:outside customers or within the company to the Mel Division. The following data have been10.18The Lyn Division of Rosal Homes Inc. produces and sells lumber that can be sold toLyn Division:СарacityPrice per board footVariable production cost per board footVariable selling cost per board footMel Division:Board feet needed100,000 board feetP4.00P2.00PO.7040,000Outside price paid per board footР3.50Jf the Lyn Division sells to the Mel Division, P0.40 per board foot can be saved in shipping costs.1. If current outside sales are 50,000 board feet, what is the minimum transfer price that theLyn Division could accept?2. If current outside sales are 70,000 board feet, what is the minimum transfer price that theLyn Division could accept?3. If Lyn Division has sufficient excess capacity to fulfill the Mel Division's needs, what will bethe effect on the company's overall contribution margin?4. If Lyn Division has sufficient excess capacity to fulfill the Mel Division's needs, what will bethe effect on the company's overall contribution margin if the transfer price negotiated isP2.40?5. If Lyn Division has sufficient excess capacity to fulfill the Mel Division's needs, what will bethe effect on the profit of Mel Division if the transfer price negotiated is P2.40?6. If Lyn Division has sufficient excess capacity to fulfill the Mel Division's needs, what will bethe effect on the profit of the company as a whole if the transfer price of P2.40 is change toP2.70?7. If Lyn Division is operating at capacity, what is the effect on the company's overallcontribution margin?

Transfer price is the price or cost on which the related parties would transact like supplies…

company to the Mel Division. The following ered for the coming period: Lyn Division: Сараacity Price per board foot Variable production cost per board foot Variable selling cost per board foot Mel Division: 100,000 board feet P4.00 P2.00 PO.70

company to the Mel Division. The following ered for the coming period: Lyn Division: Сараacity Price per board foot Variable production cost per board foot Variable selling cost per board foot Mel Division: 100,000 board feet P4.00 P2.00 PO.70

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...

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The Lyn Division of Rosal Homes Inc. produces and sells lumber that can be sold to outside customers or within the company to the Mel Division. The following data have been gathered for the coming period: Lyn Division: Capacity 100,000 board feet Price per board foot P4.00 Variable production cost per board foot P2.00 Variable selling cost per board foot P0.70 Mel Division: Board feet needed 40,000 Outside price paid per board foot P3.50 If the Lyn Division sells to the Mel Division, P0.40 per board foot can be saved in shipping costs. If Lyn Division has sufficient excess capacity to fulfill the Mel Division’s needs, what will be the effect on the…
The Lyn Division of Rosal Homes Inc. produces and sells lumber that can be sold to outside customers or within the company to the Mel Division. The following data have been gathered for the coming period: Lyn Division: Capacity 100,000 board feet Price per board foot P4.00 Variable production cost per board foot P2.00 Variable selling cost per board foot P0.70 Mel Division: Board feet needed 40,000 Outside price paid per board foot P3.50 If the Lyn Division sells to the Mel Division, P0.40 per board foot can be saved in shipping costs. If current outside sales are 70,000 board feet, what is the minimum transfer price that the Lyn Division could…
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