Plish Company manufactures only one type of washing machine and has two divisions, the Compressor...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Plish Company manufactures only one type of washing machine and has two divisions, the Compressor Division, and the Fabrication Division. The Compressor Division manufactures compressors for the Fabrication Division, which completes the washing machine and sells it to retailers. The Compressor Division "sells" compressors to the Fabrication Division. The market price for the Fabrication Division to purchase a compressor is $48.00 (Ignore changes in inventory.) The fixed costs for the Compressor Division are assumed to be the same over the range of 12,000 - 17,000 units. The fixed costs for the Fabrication Division are assumed to be $9.50 per unit at 17,000 units. Compressor's costs per compressor are: Direct materials $19.00 Direct labor $11.00 Variable overhead $3.50 Division fixed costs $8.50 Fabrication's costs per completed air conditioner are: Direct materials $156.00 Direct labor $65.00 Variable overhead $23.00 Division fixed costs $8.50 Assume the transfer price for a compressor is 150% of total costs of the Compressor Division and 1,900 of the compressors are produced and transferred to the Fabrication Division. The Compressor Division's operating income is O A. $45,600.00 OB. $45,125.00 O C. $39,900.00 OD. $119,700.00
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
