Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each.
Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company’s container plant, which is a part of Container Division. Mixing Division uses all of the container plant’s production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division.
At your request, Container Division’s general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division. These competitive prices follow:
| Volume | Total Price | Price per Case | ||||
| 590,000 equivalent casesa | $ | 5,369,000 | $ | 9.10 | ||
| 1,180,000 | 9,558,000 | 8.10 | ||||
| 1,770,000 | 12,921,000 | 7.30 | ||||
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a An equivalent case represents 24 bottles.
Container Division's cost analysis indicates that it can produce bottles at these costs:
| Volume | Total Cost | Cost per Case | ||||
| 590,000 equivalent cases | $ | 4,471,000 | $ | 7.58 | ||
| 1,180,000 | 7,952,000 | 6.74 | ||||
| 1,770,000 | 11,433,000 | 6.46 | ||||
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These costs include fixed costs of $990,000 and variable costs of $5.90 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This interest is heightened because a significant portion of a division manager’s income is an incentive bonus based on profit center results.
Mixing Division has the following costs in addition to the bottle costs:
| Volume | Total Cost | Cost per Case | ||||
| 590,000 equivalent cases | $ | 1,990,000 | $ | 3.37 | ||
| 1,180,000 | 2,790,000 | 2.36 | ||||
| 1,770,000 | 3,590,000 | 2.03 | ||||
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The corporate marketing group has furnished the following price–demand relationship for the finished product:
| Sales Volume | Total Sales Revenue | Sales Price per Case | ||||
| 590,000 equivalent cases | $ | 12,921,000 | $ | 21.90 | ||
| 1,180,000 | 23,482,000 | 19.90 | ||||
| 1,770,000 | 29,913,000 | 16.90 | ||||
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Required:
a. Amazon Beverages has used market price–based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.77 million cases (Enter your answers in thousands of dollars.)
a-1. Calculate operating profits for Container Division.
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a-2. Calculate operating profits for Mixing Division.
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a-3. Calculate operating profits for Amazon Beverages.
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b-1. Calculate operating profits for Container for volumes of 590,000, 1,180,000 and 1,770,000cases. (Enter your answers in thousands of dollars.)
|
Which volume of production is the most profitable for Container?
| 590,000 cases | |
| 1,180,000 cases | |
| 1,770,000 cases |
b-2. Calculate operating profits for Mixing for volumes of 590,000, 1,180,000 and 1,770,000cases. (Enter your answers in thousands of dollars.)
|
Which volume of production is the most profitable for Mixing?
| 590,000 cases | |
| 1,180,000 cases | |
| 1,770,000 cases |
b-3. Calculate operating profits for Amazon Beverages for volumes of 590,000, 1,180,000 and 1,770,000cases. (Enter your answers in thousands of dollars.)
|
Which volume of production is the most profitable for Amazon Beverages?
| 590,000 cases | |
| 1,180,000 cases | |
| 1,770,000 cases |
In: Accounting
Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each. Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company’s container plant, which is a part of Container Division. Mixing Division uses all of the container plant’s production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division. At your request, Container Division’s general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division.
| Volume | Total Price | Price per Case | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 400,000 equivalent casesa | $ | 2,880,000 | $ | 7.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 800,000 | 5,000,000 | 6.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1,200,000 | 6,480,000 | 5.40 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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a An equivalent case represents 24 bottles. Container Division's cost analysis indicates that it can produce bottles at these costs:
These costs include fixed costs of $800,000 and variable costs of $4 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This interest is heightened because a significant portion of a division manager’s income is an incentive bonus based on profit center results. Mixing Division has the following costs in addition to the bottle costs:
The corporate marketing group has furnished the following price–demand relationship for the finished product:
Required: a. Amazon Beverages has used market price–based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.2 million cases (Enter your answers in thousands of dollars.) a-1. Calculate operating profits for Container Division. a-2. Calculate operating profits for Mixing Division. a-3. Calculate operating profits for Amazon Beverages. b-1. Calculate operating profits for Container for volumes of 400,000, 800,000 and 1,200,000 cases. (Enter your answers in thousands of dollars.) b-2. Calculate operating profits for Mixing for volumes of 400,000, 800,000 and 1,200,000 cases. (Enter your answers in thousands of dollars.) b-3. Calculate operating profits for Amazon Beverages for volumes of 400,000, 800,000 and 1,200,000 cases. (Enter your answers in thousands of dollars.) |
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In: Accounting
Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each.
Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company’s container plant, which is a part of Container Division. Mixing Division uses all of the container plant’s production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division.
At your request, Container Division’s general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division. These competitive prices follow.
| Volume | Total Price | Price per Case | ||||
| 460,000 equivalent casesa | $ | 3,588,000 | $ | 7.80 | ||
| 920,000 | 6,256,000 | 6.80 | ||||
| 1,380,000 | 8,280,000 | 6.00 | ||||
a An equivalent case represents 24 bottles.
Container Division's cost analysis indicates that it can produce bottles at these costs.
| Volume | Total Cost | Cost per Case | ||||
| 460,000 equivalent cases | $ | 2,976,000 | $ | 6.47 | ||
| 920,000 | 5,092,000 | 5.53 | ||||
| 1,380,000 | 7,208,000 | 5.22 | ||||
These costs include fixed costs of $860,000 and variable costs of $4.60 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This interest is heightened because a significant portion of a division manager’s income is an incentive bonus based on profit center results.
Mixing Division has the following costs in addition to the bottle costs.
| Volume | Total Cost | Cost per Case | ||||
| 460,000 equivalent cases | $ | 1,860,000 | $ | 4.04 | ||
| 920,000 | 2,660,000 | 2.89 | ||||
| 1,380,000 | 3,460,000 | 2.51 | ||||
The corporate marketing group has furnished the following price–demand relationship for the finished product:
| Sales Volume | Total Sales Revenue |
Sales Price per Case |
||||
| 460,000 equivalent cases | $ | 9,476,000 | $ | 20.60 | ||
| 920,000 | 17,112,000 | 18.60 | ||||
| 1,380,000 | 21,528,000 | 15.60 | ||||
Required:
a. Amazon Beverages has used market price–based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.38 million cases. Calculate operating profits for Container Division, Mixing Division, Amazon Beverages. (Enter your answers in thousands of dollars.)
b-1. Calculate operating profits for Container, Mixing and Amazon Beverages for volumes of 460,000, 920,000 and 1,380,000 cases. (Enter your answers in thousands of dollars.)
b-2. Which volume of production is the most profitable for Container, Mixing and Amazon Beverages?
In: Accounting
Case:- DETROIT BIKES: BECOMING THE BIGGEST BICYCLE MANUFACTURER IN NORTH AMERICA. by Ivey publishing
1. Apply the PEST and PORTER e-scan model to the Detroit Bikes business model. Based on this, what is your take on the attractiveness of their industry as a business opportunity?
2. What is the competitive advantage of Detroit Bikes? Brand? Low-cost? Innovation? Niche? Diversification? Please explain. How would you characterize their target market and brand?
3. Noting all we have discussed in the course this far, what would you suggest is the best strategy to grow the business? What are the opportunities and risks with this growth strategy?
In: Economics
In North America many birds die because they collide with windows of high-rise buildings. One possible solution to resolve the problem is to construct windows angled down slightly toward the ground, so that they reflect the ground rather than an image of the sky to flying bird. An experiment compared the number of birds that died as a result of vertical windows, windows angled 20° of vertical and windows angled 40° off vertical. The angles were randomly assigned with equal probability to six windows and changed daily. Window shape, color and other external characteristics were kept identical. Window locations matched the same location characteristics in terms of ground and sky.
In: Statistics and Probability
Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each.
Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company's container plant, which is a part of Container Division. Mixing Division uses all of the container plant's production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division.
At your request, Container Division's general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division. These competitive prices follow:
Volume Total Price Price per Case 580,000 equivalent casesa $ 5,220,000 $ 9.00 1,160,000 9,280,000 8.00 1,740,000 12,528,000 7.20
a An equivalent case represents 24 bottles.
Container Division's cost analysis indicates that it can produce bottles at these costs:
Volume Total Cost Cost per Case 580,000 equivalent cases $ 4,344,000 $ 7.49 1,160,000 7,708,000 6.64 1,740,000 11,072,000 6.36
These costs include fixed costs of $980,000 and variable costs of $5.80 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This interest is heightened because a significant portion of a division manager's income is an incentive bonus based on profit center results.
Mixing Division has the following costs in addition to the bottle costs:
Volume Total Cost Cost per Case 580,000 equivalent cases $ 1,980,000 $ 3.41 1,160,000 2,780,000 2.40 1,740,000 3,580,000 2.06
The corporate marketing group has furnished the following price-demand relationship for the finished product:
Sales Volume Total Sales Revenue Sales Price per Case 580,000 equivalent cases $ 12,644,000 $ 21.80 1,160,000 22,968,000 19.80 1,740,000 29,232,000 16.80
Required:
a. Amazon Beverages has used market price-based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.74 million cases (Enter your answers in thousands of dollars.)
a-1. Calculate operating profits for Container Division.
a-2. Calculate operating profits for Mixing Division.
a-3. Calculate operating profits for Amazon Beverages.
b-1. Calculate operating profits for Container for volumes of 580,000, 1,160,000 and 1,740,000cases. (Enter your answers in thousands of dollars.)
b-2. Calculate operating profits for Mixing for volumes of 580,000, 1,160,000 and 1,740,000cases. (Enter your answers in thousands of dollars.)
b-3. Calculate operating profits for Amazon Beverages for volumes of 580,000, 1,160,000 and 1,740,000cases. (Enter your answers in thousands of dollars.)
In: Accounting
Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each.
Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company’s container plant, which is a part of Container Division. Mixing Division uses all of the container plant’s production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division.
At your request, Container Division’s general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division. These competitive prices follow:
| Volume | Total Price | Price per Case | ||||
| 450,000 equivalent casesa | $ | 3,465,000 | $ | 7.70 | ||
| 900,000 | 6,030,000 | 6.70 | ||||
| 1,350,000 | 7,965,000 | 5.90 | ||||
a An equivalent case represents 24 bottles.
Container Division's cost analysis indicates that it can produce bottles at these costs:
| Volume | Total Cost | Cost per Case | ||||
| 450,000 equivalent cases | $ | 2,875,000 | $ | 6.39 | ||
| 900,000 | 4,900,000 | 5.44 | ||||
| 1,350,000 | 6,925,000 | 5.13 | ||||
These costs include fixed costs of $850,000 and variable costs of $4.50 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This interest is heightened because a significant portion of a division manager’s income is an incentive bonus based on profit center results.
Mixing Division has the following costs in addition to the bottle costs:
| Volume | Total Cost | Cost per Case | ||||
| 450,000 equivalent cases | $ | 1,850,000 | $ | 4.11 | ||
| 900,000 | 2,650,000 | 2.94 | ||||
| 1,350,000 | 3,450,000 | 2.56 | ||||
The corporate marketing group has furnished the following price–demand relationship for the finished product:
| Sales Volume | Total Sales Revenue | Sales Price per Case | ||||
| 450,000 equivalent cases | $ | 9,225,000 | $ | 20.50 | ||
| 900,000 | 16,650,000 | 18.50 | ||||
| 1,350,000 | 20,925,000 | 15.50 | ||||
Required:
a. Amazon Beverages has used market price–based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.35 million cases (Enter your answers in thousands of dollars.)
a-1. Calculate operating profits for Container Division.
a-2. Calculate operating profits for Mixing Division.
a-3. Calculate operating profits for Amazon Beverages.
b-1. Calculate operating profits for Container for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)
Which volume of production is the most profitable for Container?
| 450,000 cases | |
| 900,000 cases | |
| 1,350,000 cases |
b-2. Calculate operating profits for Mixing for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)
Which volume of production is the most profitable for Mixing?
| 450,000 cases | |
| 900,000 cases | |
| 1,350,000 cases |
b-3. Calculate operating profits for Amazon Beverages for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)
Which volume of production is the most profitable for Amazon Beverages?
| 450,000 cases | |
| 900,000 cases | |
| 1,350,000 cases |
In: Accounting
Amazon Beverages produces and bottles a line of soft drinks using exotic fruits from Latin America and Asia. The manufacturing process entails mixing and adding juices and coloring ingredients at the bottling plant, which is a part of Mixing Division. The finished product is packaged in a company-produced glass bottle and packed in cases of 24 bottles each.
Because the appearance of the bottle heavily influences sales volume, Amazon developed a unique bottle production process at the company’s container plant, which is a part of Container Division. Mixing Division uses all of the container plant’s production. Each division (Mixing and Container) is considered a separate profit center and evaluated as such. As the new corporate controller, you are responsible for determining the proper transfer price to use for the bottles produced for Mixing Division.
At your request, Container Division’s general manager asked other bottle manufacturers to quote a price for the number and sizes demanded by Mixing Division. These competitive prices follow:
| Volume | Total Price | Price per Case | ||||
| 450,000 equivalent casesa | $ | 3,465,000 | $ | 7.70 | ||
| 900,000 | 6,030,000 | 6.70 | ||||
| 1,350,000 | 7,965,000 | 5.90 | ||||
a An equivalent case represents 24 bottles.
Container Division's cost analysis indicates that it can produce bottles at these costs:
| Volume | Total Cost | Cost per Case | ||||
| 450,000 equivalent cases | $ | 2,875,000 | $ | 6.39 | ||
| 900,000 | 4,900,000 | 5.44 | ||||
| 1,350,000 | 6,925,000 | 5.13 | ||||
These costs include fixed costs of $850,000 and variable costs of $4.50 per equivalent case. These data have caused considerable corporate discussion as to the proper price to use in the transfer of bottles from Container Division to Mixing Division. This interest is heightened because a significant portion of a division manager’s income is an incentive bonus based on profit center results.
Mixing Division has the following costs in addition to the bottle costs:
| Volume | Total Cost | Cost per Case | ||||
| 450,000 equivalent cases | $ | 1,850,000 | $ | 4.11 | ||
| 900,000 | 2,650,000 | 2.94 | ||||
| 1,350,000 | 3,450,000 | 2.56 | ||||
The corporate marketing group has furnished the following price–demand relationship for the finished product:
| Sales Volume | Total Sales Revenue | Sales Price per Case | ||||
| 450,000 equivalent cases | $ | 9,225,000 | $ | 20.50 | ||
| 900,000 | 16,650,000 | 18.50 | ||||
| 1,350,000 | 20,925,000 | 15.50 | ||||
Required:
a. Amazon Beverages has used market price–based transfer prices in the past. Using the current market prices and costs and assuming a volume of 1.35 million cases (Enter your answers in thousands of dollars.)
a-1. Calculate operating profits for Container Division.
a-2. Calculate operating profits for Mixing Division.
a-3. Calculate operating profits for Amazon Beverages.
b-1. Calculate operating profits for Container for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)
Which volume of production is the most profitable for Container?
| 450,000 cases | |
| 900,000 cases | |
| 1,350,000 cases |
b-2. Calculate operating profits for Mixing for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)
Which volume of production is the most profitable for Mixing?
| 450,000 cases | |
| 900,000 cases | |
| 1,350,000 cases |
b-3. Calculate operating profits for Amazon Beverages for volumes of 450,000, 900,000 and 1,350,000cases. (Enter your answers in thousands of dollars.)
Which volume of production is the most profitable for Amazon Beverages?
| 450,000 cases | |
| 900,000 cases | |
| 1,350,000 cases |
In: Accounting
Spacemakers of America, Inc., hired Jenny Tripplet as its bookkeeper. Pacemakers did not inquire about any prior criminal record or conduct a criminal background check of Triplett. If it had taken those steps, it would have discovered that Triplett was on probation for 13 counts of forgery and had been convicted of theft by deception. All convictions were the result of Triplett forging checks of previous employers.
Spacemakers delegated to Triplett sole responsibility for maintaining the company’s checkbook, reconciling the checkbook with monthly bank statements, and preparing financial reports. Triplett also handled the company’s accounts payable and regularly presented checks do Dennis Rose, the president of Spacemakers, so he could sign them.
Just weeks after starting her job at Spacemakers, Triplett forged Rose’s signature on a check for $3,000 made payable to her husband’s company, Triple M Entertainment Group, which was not a vendor for Spacemakers. By the end of the first full month of employment, Triplett forged 50 more checks totaling approximately $475,000. All checks were drawn against Spacemaker’s bank account at SunTrust Bank. No one except Triplet reviewed the company’s bank statements. Subsequently, a SunTrust employee visuasilly inspected a $30,670 check She became suspicious of the signature and called Rose. The SunTrust employee faxed a copy of the check to Rose, which was made payable to Triple M. Rose knew that Triple M was not one of the company’s vendors, and a Spacamekrs employee reminded Rose that Triplett’s husband owned Triple M. Rose immediately called the police and Triplett was arrested.
Spacemakers sent a letter to SunTrust Bank, demanding that the bank credit $523,106 to its account for the forged checks. The bank refused, contending that Spacemaker’s failure to provide the bank with timely notice of the forgeries barred Spacemaker’s claim. Spacemakers sued SunTrust for negligence and unauthorized payment of forged items. The trial court granted SunTrust’s motion for summary judgment. Pacemakers appealed.
Using IRAC, how should this case have been decided and why? Please, do not copy from google. I need original answer.
In: Operations Management
BellTower Company collected $13,000 in June of 2019 for 7 months of service which would take place from October of 2019 through April of 2020. What's the impact of Belltower's June collection of this money on the Balance Sheet?
In: Accounting