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Author Question: Timekeeper Corporation has two divisions, Distribution and Manufacturing. The company's primary ... (Read 97 times)

skymedlock

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Timekeeper Corporation has two divisions, Distribution and Manufacturing. The company's primary product is high-end watches. Each division's costs are provided below:

Manufacturing:Variable costs per unit$1.36
Fixed costs per unit$5.77
Distribution:Variable costs per unit$1.30
Fixed costs per unit$0.50

The Distribution Division has been operating at a capacity of 4,009,000 units a week and usually purchases 2,004,500 units from the Manufacturing Division and 2,004,500 units from other suppliers at $13.00 per unit.

Assume 110,000 units are transferred from the Manufacturing Division to the Distribution Division for a transfer price of $8.00 per unit. The Distribution Division sells the 110,000 units at a price of $18 each to customers. What is the operating income of both divisions together?
◦ $347,600
◦ $392,150
◦ $997,700
◦ $634,700


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Marked as best answer by skymedlock on Mar 6, 2021

popopong

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skymedlock

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Reply 2 on: Mar 6, 2021
Wow, this really help


brbarasa

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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