Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based...
70.2K
Verified Solution
Link Copied!
Question
Accounting
Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). The income statement for Marley's Manufacturing is shown below: Marley's Manufacturing Income Statement Month Ending August 31, 2018 Dept. A Dept. B Sales $23,000 $52,000 Cost of goods sold 10,810 27,040 Gross profit $12,190 $24.960 Utility expenses 920 3,120 Wages expense 5.750 10,920 Costs allocated from corporate 2,530 15,080 Total expenses $9,200 $29,120 Operating income/loss) in dollars $2,990 -54,160 Operating income/(loss) in percentage 13 % -8% Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley's Manufacturing, Determine the operating income for department B, assuming department A "sold" department B 1,000 units during the month and department A reduces the selling price to the market price. Round your percentage answer to one decimal place. New operating income/loss) for department B in dollars 10 New operating income/(loss) for department B in percentage 96
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
