Top Posters
Since Sunday
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
dxpayne dxpayne
wrote...
Go to Answer
Posts: 930
Rep: 1 0
6 years ago
Alsation Ltd. has two divisions:. The Machining Division prepares the raw materials into component parts, and the Assembly Division assembles the components into finished product. No inventories exist in either division at the beginning of the year. During the year the Machining Division prepared 80,000 square metres of sheet metal at a cost of $480,000. All production was transferred to the Assembly Division where the metal was converted into 80,000 units of finished product at an additional costs of $5 per unit. The 80,000 units were sold for $2,000,000.

Required:
a.   Determine the operating income for each division if the transfer price from Machining to Assembly is at cost.
b.   Determine the operating income for each division if the transfer price is $5/square metre.
c.   Since the Machining Division has all of its sales internally to the Assembly Division, does the manager care what price is selected? Why? Should the Machining Division be a cost centre or a profit centre under the circumstances?
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
Authors:
Read 55 times
1 Reply
Replies
Answer verified by a subject expert
btpsandbtpsand
wrote...
#1
Top Poster
Posts: 1199
Rep: 31 0
6 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
This verified answer contains over 180 words.
1

Related Topics

dxpayne Author
wrote...

6 years ago
Correct Slight Smile TY
54321abs
wrote...

Yesterday
Good timing, thanks!
decibul
wrote...

2 hours ago
Thank you, thank you, thank you!
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1297 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 484
  
 259
  
 4430
Your Opinion
How often do you eat-out per week?
Votes: 79
Previous poll results: Who will win the 2024 president election?