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CoursHeroTranscribedText: Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each. Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company's container plant, which is a part of Container Division. Mixing Division uses all of the container plant's production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division. At your request, Container Division's general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division. These competitive prices follow. Price per Volume Total Price Case 420, 000 equivalent cases $3, 108, 000 $7.40 840, 090 5,376, 000 6.40 1, 260,009 7, 056, 000 5.60 An equivalent case represents 24 bottles. Container Division's cost analysis indicates that it can produce bottles at these costs. Cost per Volume Total Cost Case 420, 090 equivalent cases $2, 584, 000 $6.15 840, 090 4, 348, 900 5.18 1, 260, 000 6, 112, 000 4.85 These costs Include fixed costs of $820,000 and variable costs of $4.20 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This Interest Is heightened because a significant portion of a division manager's Income is an incentive bonus based on profit center results. Mixing Division has the following costs in addition to the bottle costs. Cost per Volume Total Cost Case 420, 000 equivalent cases $1, 820, 000 $4.33 840, 090 2, 620, 000 3.12 1, 260, 090 3, 420, 000 2.71The corporate marketing group has furnished the tollowmg pricedemand relationship iorthe finished product: Total Sales Sales Price Sales Volume Revenue per Case 426,666 equivalent cases 5- 8,484,666 526.26 846,666 15,283,666 18.26 1,266,666 19,152,666 15.26 Required: 3. Amazon Beverages has used market pricebased transfer prices In the past. Using the current market prices and costs and assuming a volume oi'l.26 million cases. Calculate operating profits for Container Division, Mixing Division. Amazon Beverages. h-1. Calculate operating profits for Container, Mixing and Amazon Beverages for volumes of 420,000, 840,000 and 1,260,000 cases. 6-2. Which volume of production lsthe most profitable for Container, Mlltlng and Amazon Beverages? Reg A Reg B1 Reg B2 Amazon Beverages has used market pricebased transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.26 million cases. Calculate operating prots for Container Division, Mixing Division, Amazon Beverages. {Enter your answers in thousands of dollars.) Prots for Container Division = Prots for Mixing Division Prots for Amazon Beverages = Req A Reg Bl Reg B2 Calculate operating prots for Container, Mixing and Amazon Beverages for volumes of 420,000, 340,000 and 1,260,000 cases. [Enter your answers in thousands of dollars.) Container prot Mixing prot Amazon Beverages prot Reg A Reg Bl Reg B2 Which volume of production is the most protable for Container, Mixing and Amazon Beverages? Most protable volume for Container = Most protable volume for Mixing Most protable volume for Amazon Beverages

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