Question

In: Accounting

Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure.

Please fill in the 4 blanks in the spreadsheet.

Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation.

Marley's Manufacturing
Income Statement
Month Ending August 31, 2018

Dept. ADept. B
Sales$23,000
$51,000
Cost of goods sold11,040
26,520
Gross profit$11,960
$24,480
Expenses:



Utility expenses$1,380
$3,060
Wages expense5,750
10,200
Costs allocated from corporate2,530
14,280
Total expenses$9,660
$27,540
Operating income/(loss) in dollars$fill in the blank 1
$fill in the blank 2
Operating income/(loss) in percentagefill in the blank 3%fill in the blank 4%

Solutions

Expert Solution

  • Requirement asked

Marley's Manufacturing

Income Statement

Month Ending August 31, 2018

Dept. A

Dept. B

Sales

$23,000

$51,000

Cost of goods sold

$11,040

$26,520

Gross profit

$11,960

$24,480

Expenses:

Utility expenses

$1,380

$3,060

Wages expense

$5,750

$10,200

Costs allocated from corporate

$2,530

$14,280

Total expenses

$9,660

$27,540

Operating income/(loss) in dollars

$2,300

[$11960 - 9660]

($3,060)

[$24480 - 27540]

Operating income/(loss) in percentage

10.00%

[($2300/23000) x 100]

-6.00%

[($3060)/$51000) x 100]


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