Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow:
| Selling price per unit on the intermediate market | $ | 60 |
| Variable costs per unit | $ | 42 |
| Fixed costs per unit (based on capacity) | $ | 8 |
| Capacity in units | 25,000 | |
Sako Company has a Hi-Fi Division that could use this speaker in
one of its products. The Hi-Fi Division will need 5,000 speakers
per year. It has received a quote of $57 per speaker from another
manufacturer. Sako Company evaluates division managers on the basis
of divisional profits.
Required:
1. Assume the Audio Division is now selling only 20,000 speakers per year to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 5,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
2. Assume the Audio Division is selling all of the speakers it can produce to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 5,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
In: Accounting
Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow:
| Selling price per unit on the intermediate market | $ | 46 |
| Variable costs per unit | $ | 17 |
| Fixed costs per unit (based on capacity) | $ | 8 |
| Capacity in units | 63,000 | |
Sako Company has a Hi-Fi Division that could use this speaker in
one of its products. The Hi-Fi Division will need 10,000 speakers
per year. It has received a quote of $38 per speaker from another
manufacturer. Sako Company evaluates division managers on the basis
of divisional profits.
Required:
1. Assume the Audio Division is now selling only 53,000 speakers per year to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 10,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
2. Assume the Audio Division is selling all of the speakers it can produce to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 10,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
In: Accounting
Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow:
| Selling price per unit on the intermediate market | $ | 50 |
| Variable costs per unit | $ | 21 |
| Fixed costs per unit (based on capacity) | $ | 6 |
| Capacity in units | 57,000 | |
Sako Company has a Hi-Fi Division that could use this speaker in
one of its products. The Hi-Fi Division will need 9,000 speakers
per year. It has received a quote of $33 per speaker from another
manufacturer. Sako Company evaluates division managers on the basis
of divisional profits.
Required:
1. Assume the Audio Division is now selling only 48,000 speakers per year to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 9,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
2. Assume the Audio Division is selling all of the speakers it can produce to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 9,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
In: Accounting
Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow:
| Selling price per unit on the intermediate market | $ | 44 |
| Variable costs per unit | $ | 16 |
| Fixed costs per unit (based on capacity) | $ | 8 |
| Capacity in units | 66,000 | |
|
Required: 1. Assume the Audio Division is now selling only 54,000 speakers per year to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 12,000 speakers from the Audio Division to the Hi-Fi Division? d. From the standpoint of the entire company, should the transfer take place? 2. Assume the Audio Division is selling all of the speakers it can produce to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 12,000 speakers from the Audio Division to the Hi-Fi Division? d. From the standpoint of the entire company, should the transfer take place? |
||
In: Accounting
Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow:
| Selling price per unit on the intermediate market | $ | 42 |
| Variable costs per unit | $ | 19 |
| Fixed costs per unit (based on capacity) | $ | 9 |
| Capacity in units | 57,000 | |
Sako Company has a Hi-Fi Division that could use this speaker in
one of its products. The Hi-Fi Division will need 10,000 speakers
per year. It has received a quote of $37 per speaker from another
manufacturer. Sako Company evaluates division managers on the basis
of divisional profits.
Required:
1. Assume the Audio Division is now selling only 47,000 speakers per year to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 10,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
2. Assume the Audio Division is selling all of the speakers it can produce to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 10,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
In: Accounting
Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow:
| Selling price per unit on the intermediate market | $ | 45 |
| Variable costs per unit | $ | 18 |
| Fixed costs per unit (based on capacity) | $ | 9 |
| Capacity in units | 57,000 | |
Sako Company has a Hi-Fi Division that could use this speaker in
one of its products. The Hi-Fi Division will need 10,000 speakers
per year. It has received a quote of $29 per speaker from another
manufacturer. Sako Company evaluates division managers on the basis
of divisional profits.
Required:
1. Assume the Audio Division is now selling only 47,000 speakers per year to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 10,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
2. Assume the Audio Division is selling all of the speakers it can produce to outside customers.
a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division?
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division?
c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 10,000 speakers from the Audio Division to the Hi-Fi Division?
d. From the standpoint of the entire company, should the transfer take place?
In: Accounting
The demand curve for TVs in the US is given by Q = 80 – P, where Q indicates the number of TVs purchased and P is the price. Suppose that there are no TVs produced in the US, but they can be imported either from Mexico or from the rest of the world. The price of TVs in Mexico is $10, and the price from the lowest‐cost supplier in the rest of the world is $5. In each case, TVs are produced with a horizontal supply curve, so these prices are fixed and will not change with changes in US policy. The US MFN tariff on TVs is a specific tariff in the amount of $10 per unit imported. a) If there is no PTA, so that every country must pay the same tariff, from where will US consumers import their TVs, Mexico or the rest of the world? Compute the equilibrium price of TVs in the US, the quantity imported and consumed, and US consumer surplus, tariff revenue, and social welfare. b) Now, suppose that the US and Mexico sign a free‐trade agreement that eliminates the tariff on TVs from Mexico, but leaves the tariff on TVs from the rest of the world unchanged. How will the equilibrium change? Answer the same questions as in a) under the new policy regime. c) Identify the welfare change due to trade creation and the welfare change due to trade diversion, and draw them on a carefully‐marked graph with the equilibrium prices and quantities before and after the free‐trade agreement marked. Does this trade agreement raise or lower US welfare?
In: Economics
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Qualitative Characteristics |
Foundational Principles |
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Relevance (Feedback & Predictive) |
Economic entity |
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Representational Faithfulness: complete, neutral, free from bias |
Control |
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Comparability (consistency) |
Revenue recognition and realization |
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Verifiability |
Matching |
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Timeliness |
Periodicity |
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Understandability |
Monetary Unit |
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Going Concern |
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Historical Cost |
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Fair Value |
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Full Disclosure |
ONLY ONE ANSWER FOR EACH.
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In: Accounting
Company: Citigroup
Company analysis:
1)Full company name; home office (city, state, country); name of CEO and name of President or indicate if same; stock symbol; stock exchange where stock is traded; closing stock price as of the Friday before the date the project is due.
2)History of the company. Where was the company founded and who was/were the founders? Indicate any major events in the company’s history like mergers or acquisitions?
3)What primary industry does this company compete in and who are their major competitors. Is there any public economic data that indicates their overall competitive position?
4)What is the enterprise level strategy (mission/vision/values). What does the company stand for? Substantiate this, if you can, with research and citations. What is their “Brand Promise”?
5)Corporate level strategy. What is this strategy and if there are portfolio businesses, name the top three held by this company?
In: Operations Management
Preparing a Schedule of Cost of Finished Goods Manufactured, Cost of Goods Sold Schedule, and an Income Statement.
Listed below is information related to RRR Co’s manufacturing activities for the month of October 2020.
Ending Balance Beginning Balance
Materials Inventory $197,000 $ 211,000
Work in Process Inventory 59,000 78,000
Finished Goods Inventory 91,000 82,000
During October 2020, RRR Company purchased $105,000 of raw materials and incurred direct labor costs of $77,100. The company applies overhead at a rate of 45% of direct labor cost. General, selling and administrative costs amounted to $36,100, and the company sold 39,400 units of its product at a price of $37.84 each.
Directions:
In: Accounting