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Author Question: Bedtime Bedding Company manufactures pillows. The Cover Division makes covers and the Assembly ... (Read 54 times)

TFauchery

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Bedtime Bedding Company manufactures pillows. The Cover Division makes covers and the Assembly Division makes the finished products. The covers can be sold separately for $5.00. The pillows sell for $6.00. The information related to manufacturing for the most recent year is as follows: 

Cover Division manufacturing costs$6,000,000
Sales of covers by Cover Division4,000,000
Market value of covers transferred to Assembly6,000,000
Sales of pillows by Assembly Division7,200,000
Additional manufacturing costs of Assembly Division1,500,000
Required: 
Compute the operating income for each division and the company as a whole. Use market value as the transfer price. Are all managers happy with this concept? Explain.


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Marked as best answer by TFauchery on Mar 6, 2021

manuelcastillo

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TFauchery

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Reply 2 on: Mar 6, 2021
YES! Correct, THANKS for helping me on my review


kishoreddi

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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