Business, 20.05.2021 17:30 twocutebabe26
Chic Cycle Inc., has two divisions, A and? B, which manufacture expensive bicycles. Division A produces the bicycle frame, and division B assembles the rest of the bicycle onto the frame. There is a market for both the subassembly and the final product. Each division has been designated as a profit center. The transfer price for the subassembly has been set at the long-run average market price. The following data are available for each division:
Selling price for final product $3000
Long-run average selling price
for intermediate product 2000
Incremental cost per unit for completion in division B 1500
Incremental cost per unit in
division A 1200
The manager of division B has made the following calculation:
Selling price for final product $3000
Transferred-in cost per
unit (market) $2000
Incremental cost per unit
for completion 1500 $3500
Contribution (loss) on product $(500)
a. Should transfers be made to division B if there is no unused capacity in division A? Is the market price the correct transfer price? Show your computations.
b. Assume that division A's maximum capacity for this product is 1,000 units per month and sales to the intermediate market are now 800 units.
Should 200 units be transferred to division B? At what transfer price? Assume that for a variety of reasons, division A will maintain the $2000 selling price indefinitely. That is, division A is not considering lowering the price to outsider buyers even if idle capacity exists.
c. Suppose division A quoted a transfer price of $1500 for up to 200 units. What would be the contribution to the company as a whole if a transfer were made? As manager of division B, would you be inclined to buy at $1500? Explain.
Answers: 3
Business, 22.06.2019 04:30
4. the condition requires that only one of the selected criteria be true for a record to be displayed.
Answers: 1
Business, 22.06.2019 17:30
Which of the following services will be provided by a full-service broker but not by a discount broker? i. research of potential investment opportunities ii. purchase and sale of stock at your request iii. recommendation of investments a. i and iii b. ii only c. iii only d. i, ii, and ii
Answers: 2
Business, 22.06.2019 18:00
Your subscription to investing wisely weekly is about to expire. you plan to subscribe to the magazine for the rest of your life, and you can renew it by paying $85 annually, beginning immediately, or you can get a lifetime subscription for $620, also payable immediately. assuming that you can earn 6.0% on your funds and that the annual renewal rate will remain constant, how many years must you live to make the lifetime subscription the better buy?
Answers: 2
Business, 22.06.2019 19:30
Do a swot analysis for the business idea you chose in question 2 above. describe at least 2 strengths, 2 weaknesses, 2 opportunities, and 2 threats for that company idea.
Answers: 2
Chic Cycle Inc., has two divisions, A and? B, which manufacture expensive bicycles. Division A produ...
Mathematics, 22.11.2020 23:40
Mathematics, 22.11.2020 23:40
Spanish, 22.11.2020 23:40
Mathematics, 22.11.2020 23:40
Computers and Technology, 22.11.2020 23:40
Arts, 22.11.2020 23:40
Business, 22.11.2020 23:40
Biology, 22.11.2020 23:40
English, 22.11.2020 23:40
History, 22.11.2020 23:40
Physics, 22.11.2020 23:40
Chemistry, 22.11.2020 23:40
Computers and Technology, 22.11.2020 23:40