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radkins0108 radkins0108
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6 years ago
Bedtime Bedding Company manufactures pillows. The Cover Division makes covers and the Assembly Division makes the finished products. The covers can be sold separately for $5.00. The pillows sell for $6.00. The information related to manufacturing for the most recent year is as follows:

Cover Division manufacturing costs$6,000,000
Sales of covers by Cover Division4,000,000
Market value of covers transferred to Assembly6,000,000
Sales of pillows by Assembly Division7,200,000
Additional manufacturing costs of Assembly Division1,500,000

Required:
Compute the operating income for each division and the company as a whole. Use market value as the transfer price. Are all managers happy with this concept? Explain.
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lpvnnwclpvnnwc
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Posts: 197
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6 years ago
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radkins0108 Author
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#2
6 years ago
Appreciate the effort you put into answering, thank you!
wrote...
#3
6 years ago
You're very welcome
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