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North Ltd produces a single product and owns boiler plants A, B and C. Each boiler plant is located on a different continent. A produces a component that is assembled in either B or C. The combined capacity of B and C is not fully utilized. North’s products are sold worldwide from either B or C. For example B ‘s production can be on C’s continent if the products can be delivered faster from B than from C. Utilisation levels of B and C depend on allocation of sales between the two sites. Case 1 There is an active market for A’s products Case 2 There is no active market for A’s products   REQUIRED TO; 1. For each case identify Cash generating units for A,B and C. 2. List the indicators considered in assessing whether assets are likely to be impaired

North Ltd produces a single product and owns boiler plants A, B and C. Each boiler plant is located on a different continent. A produces a component that is assembled in either B or C. The combined capacity of B and C is not fully utilized. North’s products are sold worldwide from either B or C. For example B ‘s production can be on C’s continent if the products can be delivered faster from B than from C. Utilisation levels of B and C depend on allocation of sales between the two sites. Case 1 There is an active market for A’s products Case 2 There is no active market for A’s products   REQUIRED TO; 1. For each case identify Cash generating units for A,B and C. 2. List the indicators considered in assessing whether assets are likely to be impaired

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter19: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 12E
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North Ltd produces a single product and owns boiler plants A, B and C. Each boiler plant is located on a different continent. A produces a component that is assembled in either B or C. The combined capacity of

B and C is not fully utilized. North’s products are sold worldwide from either B or C. For example B ‘s production can be on C’s continent if the products can be delivered faster from B than from C. Utilisation levels of B and C depend on allocation of sales between the two sites.

Case 1

There is an active market for A’s products

Case 2

There is no active market for A’s products

 

REQUIRED TO;

1.

For each case identify Cash generating units for A,B and C.

2.

List the indicators considered in assessing whether assets are likely to be impaired.

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