The Slate Company manufactures and sells television sets. Its assembly division (AD) buys television screens from the screen division (SD) and assembles the TV sets. The SD, which is operating at capacity, incurs an incremental manufacturing cost of $65 per screen. The SD can sell all its output to the outside market at a price of $100 per screen, after incurring a variable marketing and distribution cost of $8 per screen. If the AD purchases screens from outside suppliers at a price of $100 per screen, it will incur a variable purchasing cost of $7 per screen. Slate’s division managers can act autonomously to maximize their own division’s operating income. Q. Now suppose that the SD can sell only 70% of its output capacity of 20,000 screens per month on the open market. Capacity cannot be reduced in the short run. The AD can assemble and sell more than 20,000 TV sets per month. a. What is the minimum transfer price at which the SD manager would be willing to sell screens to the AD?

The Can Division of Sheffield Corp. manufactures and sells recyclable containers externally for $0.97 per container. Its unit variable costs and unit fixed costs are $0.24 and $0.11, respectively. The Packaging Division wants to purchase 50,000 containers at $0.36 per unit. Selling internally will save $0.02 a container.Assuming that the Can Division has sufficient capacity, what is the minimum transfer price it should accept? a.$0.24 b.$0.36 c.$0.34 d.$0.22

Lock Division of Morgantown Corporation sells 90,000 units of part Z-25 to the outside market. Part Z-25 sells for $50, has a variable cost of $32, and a fixed cost per unit of $20. The Lock Division has a capacity to produce 125,000 units per period. The Cabinet Division currently purchases 20,000 units of part Z-25 from the Lock Division for $50. The Cabinet Division has been approached by an outside supplier willing to supply the parts for $46. What is the effect on Morgantown's overall profit if the Lock Division refuses to sell at the outside supplier’s price and the Cabinet Division decides to buy outside?    Multiple Choice   No change in Morgantown's profits.   $45,000 increase in Morgantown's profits.   $90,000 decrease in Morgantown's profits.   $280,000 decrease in Morgantown's profits.

Peppertree Company has two divisions, East and West. Division East manufactures a component that Division West uses. The variable cost to produce this component is $1.56 per unit; full cost is $1.98. The component sells on the open market for $4.96.   Assuming Division East has excess capacity, what is the lowest price Division East will accept for the component? What is the highest price that Division West will pay for it? (Enter your answers in 2 decimal places.)

Green Co. incurses cost of $15 per pound to produce Product X, which it sells for $26 per pound. The company can further process Product X to produce Product Y. Product Y would sell for $30 per pound and would require an additional cost of $10 per pound to be produced. The differential cost of producing Product Y is _____.

The Trailer division of Baxter Bicycles makes bike trailers that attach to bicycles and can carry children or cargo. The trailers have a market price of $103 each. Each trailer incurs $38 of variable manufacturing costs. The Trailer division has capacity for 29,000 trailers per year and has fixed costs of $480,000 per year. 1. Assume the Assembly division of Baxter Bicycles wants to buy 5,200 trailers per year from the Trailer division. If the Trailer division can sell all of the trailers it manufactures to outside customers (and has no excess capacity), what price should be used on transfers between divisions? 2. Assume the Trailer division currently only sells 10,200 trailers to outside customers and has excess capacity. The Assembly division wants to buy 5,200 trailers per year from the Trailer division. What is the range of acceptable prices on transfers between divisions? 1. Transfer price per trailer 2. Transfer price per trailer will be at least but not more than

The Compressor Division and the Fabrication Division of Plash Company, which exclusively produces one type of washing machine, respectively, are its two divisions. For the Fabrication Division, which completes the washing machine and sells it to retailers, the Compressor Division makes compressors. The Fabrication Division buys compressors from the Compressor Division. The Fabrication Division will spend $40.00 on a compressor, which is the market price. (Skip updates to the inventory.) It is expected that the fixed costs for the Compressor Division remain constant for orders between 5,000 and 10,000 units. The Fabrication Division's fixed expenses are estimated to be $7.50 per unit at 10,000 units. Compressor's costs per compressor are: Direct materials $15.00 Direct labor $7.25 Variable overhead $3.00 Division fixed costs $7.50 Fabrication's costs per completed air conditioner are: Direct materials $150.00 Direct labor $62.50 Variable overhead $20.00 Division fixed costs $7.50 Assume…

Meman

Urmilaben

Indicate how to present and analyze liabilities and contingencies.