Answer:
1.a- The minimum transfer price will be the marginal cost of the unit thus, the variable cost of 1.25
1.b- the maximum transfer price should be the market price as the company cannot price the units above this cost.
2.a- No as it is including a fixed cost component which is already incurred(sunk cost)
2.b- Yes I will as it is above the 1.25 variable cost which is the cost the division will face to produce the units
3.- full manufacturing cost will include the fixed cost therefore:
1.25 variable cost
+ 0.70 fixed cost
1.95 manufacturing cost
Explanation:
The Glassware Division would accept a minimum transfer price of $1.37 (variable cost plus saved selling costs). The Bottled Water Division would pay up to the external market price of $2.95. An internal transfer is feasible and profitable if the transfer price is within this range. Understanding idle capacity, the Glassware Division might still accept Justin's counteroffer of $2.40, which covers their variable costs.
The minimum transfer price that the Glassware Division would be willing to accept is the unit variable cost of $1.25 plus the saved selling costs of $0.12, equating to $1.37 per unit. The Bottled Water Division would be willing to pay at most the external market price of $2.95 per unit. An internal transfer should take place if the transfer price falls within this range.
Knowing the Glassware Division has idle capacity, Justin might agree to a transfer price of $2.89. However, even if Justin counters with an offer of $2.40, Ellyn might still be interested because this price covers their variable cost, contributes towards fixed costs, and utilizes idle capacity.
If all internal transfers take place at full manufacturing costs, the transfer price would be the sum of the unit variable cost ($1.25) and unit product fixed costs ($0.70), totaling $1.95 per unit. Transfer pricing decisions affect a firm's profitability and operations, and should carefully consider the interests of both divisions.
#SPJ11
1. Assume the firm can sell these 800 loaves at $1 per unit, will it continue to produce banana bread?2. What is the firm's total revenue?3. What is the firm's total cost?4. What is the firm's profit or loss?
Answer:
1. No
2. $800
3. 820
4. Loss = $-20
Explanation:
Total revenue = price x quantity = 800 x $1 = $800
Total cost = ( 6 x $40) + (5 × $60) + (4 × $60) + (2 × $20) = $820
Profit / loss = Total revenue - Total cost
$800 - $820 = $-20
Because the firm is earning a loss, the firm would not continue to produce.
I hope my answer helps you.
DEBIT CREDIT
Work in Process Inventory
Jan 31. Manufacturing Overhead
Raw Materials Inventory
Answer:
Materials used in production go to Work in Process so;
= 936 + 1,690 + 767
= $3,393
The materials used in the general factory will go to Manufacturing Overhead.
Date Debit Credit
Jan 31 Work in Process $3,393
Manufacturing Overhead $ 667
Raw Materials Inventory $4,060
What was the cash flow to stockholders for the year?
Answer:
$169,000 negative
Explanation:
Equity = Common stock + Additional paid in surplus
Total equity at beginning= Common stock + Additional paid in surplus
=136,000+2,610,000=$2,746,000
Total equity at end= Common stock + Additional paid in surplus
=146,000+2,910,00)=$3,056,000
Hence new equity = Total equity at End - Total equity at beginning
3,056,000-2,746,000=$310,000
Cash flow to stockholders = Dividends paid - New equity
= 141,000-310,000
= -169,000
=$169,000 negative
Answer:
The yields are perhaps the most unpredictable for the small cap fund since the securities in this account are the most risky. It does not mean that the fund is awful, only that the danger is greater, and thus the overall return is greater.If you are prepared to accept the extra risk in expectancy of a greater return, you should like to put money in this fund. The increased costs for this Fund will be anticipated.Small cap funds typically have higher spending due largely to greater operating costs, along with lower resource analysis.
Answer:
A. 1.111
B. The process is not capable
Explanation:
Part A
Capacity index help todetermine the performance of a process and how it could perform in the future. A capacity index of above 1.33 means that the process is capable but a capacity index below 1.33 means that the process is not capable. The capacity index can be calculated using equation 1;
From the mean which is 0.5, it can be determined that the process is a centered process.
For centered process, the mean = 0.5 x (Upper s. - Lower S.) = 0.5 x 0,02 = 0.04
so the capacity index for centered mean will be used
................................................1
Given standard deviation = 0.003
upper specification = 0.05
lower specification = 0.03
Therefore the capacity index of the process is 1.111
Part B
The capacity index of the process is 1.111 and it is less than 1.33, this means that the process is not capable.
Answer:
$1,085,000
Explanation:
The computation of the ending account receivable balance is shown below:
= Accounts receivable balance, 1/1/2016 + credit sales - sales returns - written off amount - Collections from customers
= $650,000 + $2,700,000 - $75,000 - $40,000 - $2,150,000
= $1,085,000
Since we have to find out the account receivable balance before allowances so we do not considered it.
ooooooooooooooooooooooooo