Division A makes a part that is sells to customers outside of the company. Data concerning this appear as follows: Sales (400,000 units) P800,000 Direct material 0.25 Direct labor 0.25 Variable Overhead 0.10 Variable Selling &Admin 0. 20 Fixed overhead 0.10 Fixed selling &admin 0.05 Division B purchases a similar part to outside suppliers for P2 and it requires 50,000 units of the part. If division B purchase the part to division A how much is the transfer price given the following situation: a. What is the maximum transfer price? b. What is the minimum transfer price if Division A has excess capacity? c. What is the minimum transfer price if Division A has no excess capacity? d. What is the minimum transfer price if 360,000 units were sold to outside customers?

Division A makes a part that is sells to customers outside of the company. Data concerning this appear as follows: Sales (400,000 units) P800,000 Direct material 0.25 Direct labor 0.25 Variable Overhead 0.10 Variable Selling &Admin 0. 20 Fixed overhead 0.10 Fixed selling &admin 0.05 Division B purchases a similar part to outside suppliers for P2 and it requires 50,000 units of the part. If division B purchase the part to division A how much is the transfer price given the following situation: a. What is the maximum transfer price? b. What is the minimum transfer price if Division A has excess capacity? c. What is the minimum transfer price if Division A has no excess capacity? d. What is the minimum transfer price if 360,000 units were sold to outside customers?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 5PB: Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units...

See similar textbooks

Similar questions

Thomas Corporation produces heating units. The following values apply for a part used in their production (purchased from external suppliers): D = 12,500 Q = 250 P = 45 C = 4.50 Required: 1. For Thomas, calculate the ordering cost, the carrying cost, and the total cost associated with an order size of 250 units. 2. Calculate the EOQ and its associated ordering cost, carrying cost, and total cost. Compare and comment on the EOQ relative to the current order quantity. 3. What if Thomas enters into an exclusive supplier agreement with one supplier who will supply all of the demands with smaller, more frequent orders? Under this arrangement, the ordering cost is reduced to 0.45 per order. Calculate the new EOQ and comment on the implications.
A company makes a product R. which requires one each of two first-level components, 5 and T. Routing data for these items are as follows tem Operation No. Dept Work Center Run Time Per unit Setup Time Average Lot size No. No. Std hours) Std hours) R 10 12 0.80 1.50 20 10 12 16 0.50 0.60 40 20 14 1.20 2.00 40 10 16 1.00 0.40 40 20 14 0.30 1.20 40 (a) The Bill of Capacity for product R (in standard hours) at work center 12 is closest to:
Learned Corporation has provided the following information: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions a. Total product cost b. Total period cost Cost per Unit Cost per Period $ 5.80 $ 4.00 $ 1.60 c. Contribution margin per unit d. Total direct manufacturing cost e. Total indirect manufacturing cost $ 0.70 $ 0.60 Variable administrative expense Fixed selling and administrative expense Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 6,000 units? b. For financial reporting purposes, what is the total amount of period costs incurred to sell 6,000 units? c. If the selling price is $23.30 per unit, what is the contribution margin per unit sold? Note: Round your answer to 2 decimal places. d. If 7,000 units are produced, what is the total amount of direct manufacturing cost incurred? e. If 7,000 units are produced, what is the total amount of indirect manufacturing…
Data table Units of D4H produced and sold 1. 2. Selling price 3. Direct materials (kilograms) 4. Direct material cost per kilogram 5. Manufacturing capacity (units of D4H) 6. Total conversion costs 7. 8. Selling and customer-service capacity 9. Total selling and customer-service costs 10. Selling and customer-service capacity cost per customer 11. Design staff 12. Total design costs 13. Design cost per employee Conversion cost per unit of capacity Alt+Q Print Done $ $ 210 41,000 $ 310,000 7.25 $ 250 2,125,000 $ 8,500 $ $ $ 2,150,000 8,600 95 customers 90 customers 900,000 10,000 12 1,045,000 $ 11,000 $ 12 1,212,000 $ 101,000 $ $ $ ZUZT $ $ ZUZZ 235 43,000 325,000 7.75 250 1,218,000 101,500 (similar to) Data table HW Score: 3.03%, 0.12 of 4 points Daint 0 10 of 1 Revenue effect of growth Cost effect of growth The company has chosen a product differentiation strategy. The growth, price- recovery, and productivity components of the change in operating income from 2021 to 2022 are as…
For each of the following independent cases (A through E), compute the missing values in the table: Total Manufacturing Cost Case AB с COE D Prime Cost 6,890 11,650 Conversion Cost 11,620 7,960 20,620 Direct Materials $ 2,110 $ 2,290 1,410 3,310 Direct Manufacturing Labor Overhead 1,160 $ 3,210 1,970 3,620 7,020 3,040 9,370 5,990
For each of the following independent cases (A through E), compute the missing values in the table: Total Manufacturing Cost Case A B CDE Prime Cost 6,880 11,680 Conversion Cost 11,570 8,050 20,670 Direct Materials $ 2,040 2,200 1,450 3,490 $ Direct Manufacturing Labor Overhead 1,100 S 3,070 2,020 3,520 6,890 3,000 9,500 5,970
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…
b. P5.00 d. P5.09 57. Ansel Corp. has provided the following data from its activity-based costirg system: Activity Cost Pool Assembly Processing Orders Inspection Total Activity 110,000 3,000 3,800 Total Cost 1,226,500 92,340 292,220 Data concerning one of the company's products, Product A appear below: 227.40 Selling price per unit Direct materials per unit Direct labor cost per unit Annual unit production and sales 96.28 23.24 360.00 Annual machine hours 2,080.00 Annual orders 120.00 Annual inspection hours 60.00 Using ABC, the product gross profit for product A is P38,836.80 b. P11,030.80 c. P11,915.20 d. P7,337.2O a. 326
Amalia Ltd currently manufactures and sells four products. Details of these products and relevant information are given below, for one period.Product P1 P2 P3 P4Output (Unit) 240 200 160 240Machine hours 8 6 4 6 (per unit) Cost per unit: Direct material £80 £100 £60 £20Direct labour £56 £42 £28 £42 Production overheads: Indirect material £20,860Indirect labour £10,500Rent £7,200Insurance £4,200Depreciation £9,240 Production overheads are currently absorbed by using a plant-wide rate per machine hour. Required:(a) You have been asked by the financial director to calculate the cost per unit for each product. All overhead costs are absorbed on a machine hour basis (show your workings as full as possible).(b) Compare the traditional…
The East Company manufactures several different products. Unit costs associated with Product ORD210 are as follows: Direct materials $54Direct manufacturing labor 8Variable manufacturing overhead 11Fixed manufacturing overhead 25 Sales commissions (2% of sales) 5Administrative salaries 12Total$115What are the period costs per unit associated with Product ORD203 ? Oa. $120 b. $50 c. $17© d $18
Goodfriend Corp. provides the following information: Service Service Dept. Z Dept. X $1,000 $600 Costs to be allocated Proportions of service provided by Dept. X Proportions of service provided by Dept. Z Compute the cost allocations To S: S .10 .20 Production Dept. S .20 .45 Production Dept. T to Dept. S and Dept. T under the reciprocal method: To T: S .60 .45
Vanvalkenburg, Inc., manufactures and sells two products: Product Q5 and Product JO. The company has an actvity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Overhead Activity Cost Pools Labor-related Measures Cost Product 05 Product J0 Total DLHS $191,748 70,536 295,592 3,000 300 4,300 2,800 5,800 Production orders Order size orders 500 800 MHs 4,500 8,800 $557,876 The activity rate for the Production Orders activity cost pool under activity-based costing is closest to: Multiple Cholce $63.40 per order S6874 per order S8817 per oroer 92 F AQI 61 pe here to search DELL 3.