Ask Question
BusinessBusiness
4 December, 10:01

T-comm makes a variety of products. it is organized in two divisions, north and south. the managers for each division are paid, in part, based on the financial performance of their divisions. the south division normally sells to outside customers but, on occasion, also sells to the north division. when it does, corporate policy states that the price must be cost plus 20 percent to ensure a "fair" return to the selling division. south received an order from north for 300 units. south's planned output for the year had been 1,200 units before north's order. south's capacity is 1,500 units per year. the costs for producing those 1,200 units follow

+2
Answers (1)
  1. 4 December, 10:15
    0
    Total Per Unit

    Materials $155,200 $96

    Direct labor $57,600 $48

    Other costs varying with output $34,800 $29

    Fixed costs $540,000 $450

    Total costs $747,600 $623

    Since South is going to increase its production by 300 more units to be able to sell them to North, that would change the average fixed cost per unit = $540,000 / 1,500 units = $360 per unit.

    Therefore the total cost per unit = $96 + $48 + $29 + $360 = $533 (instead of $623).

    Since South charges its sales to North a 20% margin, the selling price per unit should = $533 x 120% = $639.60 and the total invoice for the 300 units = $639.60 per unit x 300 units = $191,880
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “T-comm makes a variety of products. it is organized in two divisions, north and south. the managers for each division are paid, in part, ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Rajan Company's most recent balance sheet reported total assets of $1.84 million, total liabilities of $0.83 million, and total equity of $1.01 million. Its Debt to equity ratio is:
Answers (1)
In the text of your paper, you quote from a 2005 article by frederick lamb, titled marketing programs seek technology proficiency.
Answers (1)
A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:
Answers (1)
Can you perform all the essential functions of the job with or without reasonable accommodation? yes or no
Answers (1)
Critics of capitalism and Corporate America increasingly argue that corporations should follow socially responsible standards higher than that imposed by law. True False
Answers (1)
New Questions in Business
Adamson Company manufactures four lines of garden tools. As a result of an activity analysis, the accounting department has identified eight activity cost pools.
Answers (1)
Compute the 2019 Federal income tax liability and the marginal and effective tax rates in each of the following independent cases. Click here to access the 2019 tax rate schedule. If required, round the tax liability the nearest dollar.
Answers (1)
For a portfolio of 40 randomly selected stocks, which of the following is most likely to be true? a. The beta of the portfolio is less than the weighted average of the betas of the individual stocks. b.
Answers (1)
What publication can give you an idea of how administrative jobs are going to change in the future? A: Office Pro B: Occupational Outlook Handbook C: From 9 to 5 D: The Executary
Answers (1)
At a four-way stop, if two cars arrive at the intersection at the same time: A) the larger car has the right of way B) the vehicle on the right yields to the vehicle on the left C) the smaller car has the right of way D) the vehicle on the left
Answers (1)
Home » Business » T-comm makes a variety of products. it is organized in two divisions, north and south. the managers for each division are paid, in part, based on the financial performance of their divisions.
Sign Up Forgot Password?