You must have javascript enabled to view this website. Please change your browser preferences to enable javascript, and reload this page.
United Industries has two divisions-the Manchester Division and the Rooney Division. Information about a product that the Manchester Division produces is as follows:
Revenue
$150 per unit
Variable manufacturing costs
$40 per unit
Fixed manufacturing overhead
$15 per unit
Expected annual sales
10 000 units
The Manchester Division can produce up to 12 000 units of this product per year. It is a component of a product that the Rooney Division manufactures. The Rooney Division requires 500 units of this component, which it can purchase from an outside supplier for $151 each. The minimum transfer price that the Manchester Division would accept is:
The Manchester Division can produce up to 12 000 units of this product per year. It is a component of a product that the Rooney Division manufactures. The Rooney Division requires 500 units of this component, which it can purchase from an outside supplier for $151 each. The maximum transfer price that the Rooney Division would accept is:
The following information was taken from the segmented profit statement of Victorian Quality Bakers:
Victorian Quality Bakers
Geelong Division
Bendigo Division
Sales revenue
$12 000 000
$5 000 000
$7 000 000
Variable operating expenses:
7 000 000
3 000 000
4 000 000
Controllable fixed expenses
500 000
300 000
200 000
Non-controllable fixed expenses
100 000
Common costs
2 000 000
The profit margin attributable to Geelong Division is:
The profit margin controllable by the manager of Geelong Division is: