BUSINESS COLLEGE

Sandpiper Inc. has a division that manufactures a component that sells for $ 160 and has a variable cost of $ 35. Another division of the company wants to purchase the component. Fixed cost per unit of the component is $ 25. What is the minimum transfer price if the division is operating at capacity?

Answers

Answer 1

Answer:

Answer:

market price $160

Explanation:

The division is operating at capacity.

This means is selling all the output to the market.

So if the division purchase at a lower price than market, it will reduce the profit of the division.

It this case the division minumin transfer price is the market price which is $160 Doing otherwise decrease the income of the company.

Related Questions

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Lorenzo Company applies overhead to jobs on the basis of direct materials cost. At year-end, the Work in Process Inventory account shows the following. Work in Process Inventory Date ExplanationDebit Credit Balance Dec.31 Direct materials cost1,900,000 1,900,000 31 Direct labor cost210,000 2,110,000 31 Overhead applied684,000 2,794,000 31 To finished goods 2,723,000 71,000 1. Determine the predetermined overhead rate used (based on direct materials cost). 2. Only one job remained in work in process inventory at December 31. Its direct materials cost is $22,000. How much direct labor cost and overhead cost are assigned to this job

Bridge Building Company estimates that it will incur $1,200,000 in overhead costs for the year. Additionally, the company estimates 50,000 direct labor hours will be spent building custom walking bridges for the year at a total direct labor cost of $600,000. What is the predetermined overhead rate for Bridge Building Company if direct labor costs are to be used as an allocation base?

Answers

Answer:

Predetermined manufacturing overhead rate= $2 per direct labor dollar

Explanation:

Giving the following information:

Estimated overhead cost= $1,200,000

Estimated direct labor cost= $600,000.

To calculate the predetermined overhead rate, we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 1,200,000 / 600,000

Predetermined manufacturing overhead rate= $2 per direct labor dollar

Final answer:

The predetermined overhead rate of Bridge Building Company is 2, which is calculated by dividing the overhead costs by the direct labor costs. This signifies that for every dollar of direct labor cost, the company allocates two dollars to overhead costs.

Explanation:

The predetermined overhead rate of the Bridge Building Company can be calculated by dividing the total estimated overhead costs by the total estimated direct labor costs as follows:

Overhead costs = $1,200,000
Direct labor costs = $600,000
Predetermined overhead rate = Overhead costs / Direct labor costs
Therefore, the predetermined overhead rate = $1,200,000 / $600,000 = 2

This means that for every dollar of direct labor cost, the Bridge Building Company allocates two dollars to overhead costs. This rate is used as the allocation base for their overhead.

Learn more about Predetermined Overhead Rate here:

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Assume that Jose is indifferent between investing in a corporate bond that pays 10 percent interest and a stock with no growth potential that pays an 9.7 percent dividend yield. Assume that the tax rate on dividends is 15 percent. What is Jose's marginal tax rate?a. 47%.b. 37%.c. 32%.d. 15%.e. None of these.

Answers

Answer:

e. None of these.

Explanation:

Step 1. Given information.

Taxable Dividend Yield = 9.7%

Tax rate on Dividend yield=15%

Interest rate=10%

Let Tax rate on Interest=X

Step 2. Formulas needed to solve the exercise.

Interest rate * (1 - x) = taxable dividend yield ( 1 - tax rate on dividend yield)

Step 3. Calculation.

0.10*(1-x)=0.097*(1-0.15)

0.10-0.10x=0.08245

0.10x=0.01755

x=0.01755/0.10

=0.1755

=17.55%

Step 4. Solution.

e. None of these.

Which of the following is something a company could do to foster bonding and affective commitment? Multiple Choice add dental coverage to its health insurance package
offer incentives to the team with the highest sales
offer college reimbursement for business classes
offer free leadership seminars to all employees
hold a weekly "employee appreciation" party

Answers

Answer:

The correct answer is letter "E": hold a weekly "employee appreciation" party.

Explanation:

Organizational commitment plays a key role in employees' performance. The more engaged workers are with the company they work for, the more likely their production is going to be higher. Affective commitment refers to increasing the bonds that link workers within the organization. Casual reunions after every period of time are one of the many activities firms could use to engage employees with their brand.

Corporation needs to raise $70 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $30 per share and the company’s underwriters charge a spread of 8 percent. If the SEC filing fee and associated administrative expenses of the offering are $575,000, how many shares need to be sold? (Do not round intermediate calculations and enter your answer in shares, not millions of shares, rounded to the nearest whole number, e.g., 1,234,567.)

Answers

Answer:

$2536.232

Explanation:

The spread in this case is 30*8% = 2.4

A spread is simply gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity and the net proceeds are the amount of money the seller receives following the sale of an asset after all costs and expenses are deducted from the gross proceeds.

The net proceeds in this case is 30-2.4 =27.6

To get the number of share we can simply divide the funds need by the net proceeds per share = 70000000/27.6 = $2536.232. Therefore the correct answer is $2536.232

The following data pertains to Xena Corp.: Xena Corp. Total Assets $23,610 Interest-Bearing Debt (market value) $11,070 Average borrowing rate for debt 10.2% Common Equity: Book Value $ 6,150 Market Value $25,830 Marginal Income Tax Rate 37% Market Beta 1.73 Determine the weight on equity capital that should be used to calculate Xena's weighted-average cost of capital. Select one: A. 73.8%
B. 70.0%
C. 24.0%
D. 38.7%

Answers

Answer:

Option (B) is correct.

Explanation:

Given that,

Total Assets = $23,610

Interest-Bearing Debt (market value) = $11,070

Average borrowing rate for debt = 10.2%

Common Equity:

Book Value = $6,150

Market Value = $25,830

Marginal Income Tax Rate = 37%

Market Beta = 1.73

Hence,

Weight on equity capital = Equity ÷ (Debt + Equity)

= 25,830 ÷ (11,070 + 25,830)

= 25,830 ÷ 36,900

= 70%

Therefore, the weight on equity capital is 70%.

Buffy is engaging product users to create an exhaustive list of things that bother them when they use the product and how often those situations arise, then asking the consumers to rate the list in order of importance and asking which brands are associated with the items on the list. She is using an approach called _____________________________

Answers

Answer: Problem detection

Explanation: Problem detection is used in R&D, it is a techniques that asks consumers who are familiar with the product or service to ponder upon an exhaustive list of things that bothers them while using the product.

This is done to find the ideas to make creative strategies and improvements in product/service.

Problem Detection approach identifies and prioritizes the most pressing consumer concerns so that the brand they are associated with can address unmet needs that exist in the marketplace.

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