QS 22-19 (Algo) Determining transfer prices with excess capacity LO C1The Windshield division of Jaguar Company makes windshields for use in its Assembly division. The Windshield division incursvariable costs of $296 per windshield and has capacity to make 590,000 windshields per year. The market price is $520 perwindshield. The Windshield division incurs total fixed costs of $3,750,000 per year.If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers betweenthe Windshield and Assembly divisions?Transfer price per windshield will be at leastbut not more thanDrav

Transfer price means the price charged by one department from other department of the same company…

Answered: QS 22-19 (Algo) Determining transfer…

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter20: Variable Costing For Management Analysis

Section: Chapter Questions

Problem 20.5CP

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Contribution margin reporting and analysis for a service company The management of East Coast Railroad Company introduced in Exercise 20 improved the profitability of the Atlanta/Baltimore route in May by reducing the price of a railcar from 600 to 500. This price reduction increased the demand for rail services. Thus, the number of railcars increased by 275 railcars to a total of 700 railcars. This was accomplished by increasing the size of each train but not the number of trains. Thus, the number of train-miles was unchanged. All the activity rates remained unchanged. A. Prepare a contribution margin report for the Atlanta/Baltimore route for May. Calculate the contribution margin ratio in percentage terms to one decimal place. B. Prepare a contribution margin analysis to evaluate managements actions in May. Assume that the May planned quantity, price, and unit cost were the same as April.
Variable costing income statement and contribution margin analysis for a service company The actual and planned data for Underwater University for the Fall term were as follows: Actual Planned Enrollment 4,500 4,125 Tuition per credit hour 120 135 Credit hours 60,450 43,200 Registration, records, and marketing cost per enrolled student 275 275 Instructional costs per credit hour 64 60 Depreciation on classrooms and equipment 825,600 825,600 Registration, records, and marketing costs vary by the number of enrolled .students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. A. Prepare a variable costing income statement showing the contribution margin and income from operations for the Fall term. B. Prepare a contribution margin analysis report comparing planned with actual performance for the Fall term.
(Appendix 11A) Cycle Time, Velocity, Conversion Cost The theoretical cycle time for a product is 30 minutes per unit. The budgeted conversion costs for the manufacturing cell are 2,700,000 per year. The total labor minutes available are 600,000. During the year, the cell was able to produce 1.5 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per unit (the amount of conversion cost actually assigned to the product). 3. CONCEPTUAL CONNECTION Discuss how this approach to assigning conversion costs can improve delivery time performance.

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