The Josh-Lester Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit center. Each division manager has been delegated full authority on all decisions nvolving the sale of that division's output both to outsiders and to other divisions of Josh-Lester. i(Click the icon to view the information on the divisions.) Less: C Contribution margin from selling units to other customers The company already completed an analysis to determine if it was in its best interest have division C purchase 1,300 units from an external supplier for $125 per unit, assuming that there are no alternative uses for internal facilities of division A. (Click the icon to view the results of the analysis.) Begin by calculating the contribution margin from selling units to other customers. Then calculate the net benefit (cost) to the company as a whole. (Enter a net cost using parentheses or a minus sign.) Now, assume that division A can sell the 1,300 units to other customers at $151 per with variable marketing costs of $6 per unit. Read the requirement.
The Josh-Lester Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit center. Each division manager has been delegated full authority on all decisions nvolving the sale of that division's output both to outsiders and to other divisions of Josh-Lester. i(Click the icon to view the information on the divisions.) Less: C Contribution margin from selling units to other customers The company already completed an analysis to determine if it was in its best interest have division C purchase 1,300 units from an external supplier for $125 per unit, assuming that there are no alternative uses for internal facilities of division A. (Click the icon to view the results of the analysis.) Begin by calculating the contribution margin from selling units to other customers. Then calculate the net benefit (cost) to the company as a whole. (Enter a net cost using parentheses or a minus sign.) Now, assume that division A can sell the 1,300 units to other customers at $151 per with variable marketing costs of $6 per unit. Read the requirement.
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter24: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 8E: Rocky Mountain Airlines Inc. has two divisions organized as profit centers, the Passenger Division...
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