Division A manufactures electronic circuit boards. The boards can be sold either

Question

Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A:

Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic instrument manufactured by that division. (one board per instrument). Division B incurred $270 in additional variable cost per instrument and then sold the instruments for $610 each.

Prepare income statements for Division A, Division B, and the company as a whole.

Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A:

Explanation / Answer

Sales revenue (15400*184) -A 2833600 Sales revenue (5400*610) - B 3294000 Total sales revenue: 6127600 Less: Costs Division -A cost (20800 *128) 2662400 Division -B cost (5400*270) 1458000 4120400 Total Income: $2,007,200                 (OR) Division -A Total produced circute boards = 20800 Sales Revenue (20800 *184) 3827200 Less: Variable cost (20800 * 128) 2662400 Income from Division A $1,164,800 Division -B Sales revenue (5400 *610) 3294000 Less: Transfored cost (5400*184) 993600 Less: Variable cost (5400*270) 1458000 Income from Division B $842,400 Total Income: $2,007,200 Thank you.... Sales revenue (15400*184) -A 2833600 Sales revenue (5400*610) - B 3294000 Total sales revenue: 6127600 Less: Costs Division -A cost (20800 *128) 2662400 Division -B cost (5400*270) 1458000 4120400 Total Income: $2,007,200

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