Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $77 per unit and would substitute the part made by Division X. Division Y requires 7,800 units of the part each period. Division X can sell all tomers What is the Jowest acceptable transfer price from the standpoint of the selling division? ite it molron to

Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $77 per unit and would substitute the part made by Division X. Division Y requires 7,800 units of the part each period. Division X can sell all tomers What is the Jowest acceptable transfer price from the standpoint of the selling division? ite it molron to

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 10MCQ

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Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. a.Determine the total manufacturing costs and the cost amount per unit for the production and sale of 200,000 units. b.Determine the product cost markup percentage per unit. Round to two decimal place. c.Determine the selling price per unit. Round to the nearest dollar.
Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases. a. Direct material cost per unit. b. Fees for using a patent of $500,000 plus $0.25 for each unit produced. c. Salary of quality control supervisor. d. Straight-line depreciation per unit on factory equipment. e. Total direct materials cost.
Mario Company is considering discontinuing a product. The costs of the product consist of $20,000 fixed costs and $15,000 variable costs. The variable operating expenses related to the product total $4,000. What is the differential cost? A. $19,000 B. $15,000 C. $35,000 D. $39,000
Waterberry Company operates a single - product entity. Data relating to the produ follows.Time left 1:07:22it ofAnnual volume 64 000 units Selling price per unit $50Variable manufacturing cost per unit14Annual fixed manufacturing costs 640 000Variable marketing and distribution costs per unit6Annual fixed non - manufacturing costs 320 000What is the total variable cost per unit of the above product?a.bC.d.$6$14520$13
XYZ Company has two divisions, X and Y. X makes product X1 and Y makes product Y+. Every unit of product Y+ requires one unit of product X1 as a component. Y purchases most of its X1 requirement from X although sometimes it makes purchases from outside suppliers. Relevant details of products X1 and Y+ are tabulated as follows: Product X1 Product Y+ Established selling price $30 $50 Variable Cost Per Unit - Mat 8 5 Transfer price 30 Labor 5 3 Overhead 2 2 Total Variable Cost 15 40 Fixed Costs 500,000 225,000 Annual Outside Demand 100,000 25,000 Plant Capacity 130,000 30,000 Investment in Divisions: (X) $ 6,625,000 (Y) $ 1,250,000 Division Y is currently achieving an ROI below target. It’s manager blames this on the high transfer price of product X1. The manager of Division X claims that the current transfer price ($30) is appropriate since ‘it is determined by the market’. The manager of division…
XYZ Company has two divisions, X and Y. X makes product X1 and Y makes product Y+. Every unit of product Y+ requires one unit of product X1 as a component. Y purchases most of its X1 requirement from X although sometimes it makes purchases from outside suppliers. Relevant details of products X1 and Y+ are tabulated as follows: Product X1 Product Y+ Established selling price $30 $50 Variable Cost Per Unit - Mat 8 5 Transfer price 30 Labor 5 3 Overhead 2 2 Total Variable Cost 15 40 Fixed Costs 500,000 225,000 Annual Outside Demand 100,000 25,000 Plant Capacity 130,000 30,000 Investment in Divisions: (X) $ 6,625,000 (Y) $ 1,250,000 Division Y is currently achieving an ROI below target. It’s manager blames this on the high transfer price of product X1. The manager of Division X claims that the current transfer price ($30) is appropriate since ‘it is determined by the market’. The manager of division…
KPR manufactures deals in various products. Relevant details of the products are as under: AWAXAYAZ Estimated annual demand (units)5000100070008000 Sales price per unit (Rs.)150180154175 Material consumption: Q (Rs)2729.524.529.75 Labor hours (Rs)5056.2543.7562.5 Variable overheads (based on labor cost) 70%80%10%90% Fixed overheads per unit (Rs.)10201416 Machine hours required: Processing machine hours 56810 The capacity utilization is as under:Hours Processing machine 150,000 RequiredCompute the number of units of each product that the company should produce in order tomaximize the profit. (B) KPR manufactures is considering a special order for 20 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is Rs 184 and its unit product cost is Rs140.00 as shown below: Direct materials . . . . . . . . . . . . . . . . . . . . Rs 81.00Direct labor . . . . . . . . . . . . . . . . . . . . . . . 42.00Manufacturing…
Division A makes a part that it sells to customers outside of the company. Data concerning this part appear below: Selling price to outside customers $ 75 Variable cost per unit $ 50 Total fixed costs $ 400,000 Capacity in (units) 25,000 Division B of the same company would like to use the part manufactured by Division A in one of its products. Division B currently purchases a similar part made by an outside company for $70 per unit and would substitute the part made by Division A. Division B requires 5,000 units of the part each period. Division A can already sell all of the units it can produce on the outside market. What should be the lowest acceptable transfer price from the perspective of Division A? Multiple Choice $75. $66. $50. $16.
ch7q39 Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income Werner Company produces and sells disposable foil baking pans to retailers for $2.95 per pan. The variable cost per pan is as follows: Direct materials $0.22 Direct labor 0.56 Variable factory overhead 0.70 Variable selling expense 0.13 Fixed manufacturing cost totals $303,290 per year. Administrative cost (all fixed) totals $41,358. Required: 1. Compute the number of pans that must be sold for Werner to break even. pans 2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the nearest cent. Unit variable cost $ Unit variable manufacturing cost $ Which is used in cost-volume-profit analysis?Unit variable cost 3. How many pans must be sold for Werner to earn operating income of $11,524? pans 4. How much sales revenue must Werner have to earn operating income 11524$
Relevant costs; special order pricingKantrovitz Company is a manufacturer of industrial components. One of its products, AP110, is used as a subcomponent in appliance manufacturing. This product has the following information per unit: Selling price $150.00 Costs: Direct material $20.00 Direct labor 15.00 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 30.00 Shipping and handling 3.00 Fixed selling and administrative 10.00 Total per-unit cost $90.00 a. Kantrovitz has received a special, one-time order for 1,600 AP110 parts. Assuming Kantrovitz has excess capacity, what is the minimum price that is acceptable for beginning negotiations on this order? Answer: $50 d. Referring to (a), Kantrovitz has received a special, one-time order for 1,600 AP110 parts. Assume that Kantrovitz is operating at full capacity, and that the contribution of the output would be displaced by the one-time special order. Using the original data, compute the minimum…
Relevant costs; special order pricingKantrovitz Company is a manufacturer of industrial components. One of its products, AP110, is used as a subcomponent in appliance manufacturing. This product has the following information per unit: Selling price $150.00 Costs: Direct material $20.00 Direct labor 15.00 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 30.00 Shipping and handling 3.00 Fixed selling and administrative 10.00 Total per-unit cost $90.00 a. Kantrovitz has received a special, one-time order for 1,000 AP110 parts. Assuming Kantrovitz has excess capacity, what is the minimum price that is acceptable for beginning negotiations on this order? $Answer b. Kantrovitz has 5,000 units of AP110 in inventory that have some defects. The units cannot be sold through regular channels without a significant price reduction. What per-unit cost figure is relevant for setting a minimum selling price on these units? $Answer c. During the next…
Relevant costs; special order pricingKantrovitz Company is a manufacturer of industrial components. One of its products, AP110, is used as a subcomponent in appliance manufacturing. This product has the following information per unit: Selling price $150.00 Costs: Direct material $20.00 Direct labor 15.00 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 30.00 Shipping and handling 3.00 Fixed selling and administrative 10.00 Total per-unit cost $90.00 a. Kantrovitz has received a special, one-time order for 1,600 AP110 parts. Assuming Kantrovitz has excess capacity, what is the minimum price that is acceptable for beginning negotiations on this order? $Answerb. Kantrovitz has 8,000 units of AP110 in inventory that have some defects. The units cannot be sold through regular channels without a significant price reduction. What per-unit cost figure is relevant for setting a minimum selling price on these units? $Answerc. During the next year,…