Question
managerial accounting help ASAP?!?!
ESSAY. Write your answer in the space provided or on a separate sheet of pa per endix 1IA) Larinore Corporation has a Castings Division that does casting work of various The company's Machine Products Division has asked the Castings Division to provi types. 20,000 special castings each year on a continuing basis. The special castings would require $10 pe de it with variable production costs. The Machine Products Division has a bid from an outside suypplier of $29 per unit for the castings In order to have time and space to produce the new castings, the Castings Division would have back production of another casting: th unit, and requires $12 per unit in variable production costs. Boxing and shipping costs of the e RB4, which it presently is producing. The RB4 sells for S to cut 36 per are $4 p er unit. Boxing and shipping costs for the new special casting would be only $1 per unit. The company is now producing this casting and selling 100,000 units of the RB4 each year. Production and sales of would drop by 20% if the new casting is produced. Required is the range of transfer prices within which both the divisions' profits would increase as a a) What result of agreein Machine Products Division? b) g to the transfer of 20,000 castings per year from the Castings Division to the it in the best interests of Larinore Corporation for this transfer to take place? Explain. Is g data have been extracted from the year-end reports of two companies: Company X 2) The followin Company Y Company Company Y $800.000 $56,000 Sales Operating income Average operating assets Margin Turnover $125,000 4% 6 Return on investment 1 4% Required ill in the missing data on the above table.
Explanation / Answer
1) The first qs is a little blur but i will solve the 2nd qs for you.
2) FORMULA SHEET :-
FINAL SOLUTION
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Company X Y Sales 800000 =125000*6 Net operating income 56000 =125000*6*0.04 Avg operating assets =56000/0.14 125000 Margin =56000/800000 0.04 Turnover =800000/(56000/0.14) 6 Return on Investment 0.14 =(125000*6*0.04)/125000
