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8_murik_8 [283]
3 years ago
8

A company has two divisions and evaluates management using return on investment. Division 1 currently makes a part that it sells

to Division 2 and to outside customers. The selling price to Division 2 is $25, variable cost is $18, and fixed costs are $80,000. Division 1 wants to increase the selling price to $28.
Division 2 can purchase the same part from an outside supplier for $26; however, if Division 2 gets the parts from the outside supplier, Division 1 will end up with excess capicity.

From an overall company perspective:

a. Division 1 should continue to do business with Division 2 and charge $28 per part.

b. Divison 1 should continue to do business with Division 2 and charge $25 per part.

c. Division 1 should continue to do business with Division 2 because Division 1's variable cost per part is only $18.

d. Division 2 should do business with the outside supplier.

e. Division 2 should split its business between Division 1 and the outside supplier.
Business
1 answer:
Anton [14]3 years ago
7 0

Answer:

c. Division 1 should continue to do business with Division 2 because Division 1's variable cost per part is only $18.

Explanation:

Since the variable cost per part is only $18 and Division 1  sells to Division 2 at $25, it is in the company's overall interest that business should continue between the two divisions.

The cost of getting the part from outside is $26.  This will incur more cost to the company and create excess capacity for Division 1.

Fixed costs are not relevant in making a decision of this nature.  The costs would be incurred irrespective of the decision made.  They are therefore irrelevant.  The relevant cost is the variable cost of $18 per unit.  It should be the focus of the decision, including the possibility of excess capacity for Division 1.

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Clarifying the issues of a problem is the _____ step in the problem solving process.
solmaris [256]

Answer:

hii there

The correct answer is option ( A )

8 Step Problem Solving Process

Step 1: Define the Problem. What is the problem?

Step 2: Clarify the Problem.

Step 3: Define the Goals.

Step 4: Identify Root Cause of the Problem.

Step 5: Develop Action Plan.

Step 6: Execute Action Plan.

Step 7: Evaluate the Results.

Step 8: Continuously Improve

Explanation:

Hope it helps

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8 0
3 years ago
Gugenheim, Inc., has a bond outstanding with a coupon rate of 7.7 percent and annual payments. The yield to maturity is 8.9 perc
Anna [14]

Answer:

Bond price= $1,793.62

Explanation:

Giving the following information:

Face value= $2,000

Number of periods= 17

Cupon rate= 0.077

YTM= 0.089

T<u>o calculate the price of the bond, we need to use the following formula:</u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 154*{[1 - (1.089^-17)] / 0.089} + [2,000/1.089^17)

Bond Price​= 1,324.21 + 469.41

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3 0
3 years ago
Presented below is the adjusted trial balance of Splish Brothers, Inc. at December 31, 2017. Debit Credit Cash $ ? Supplies 1,33
igomit [66]

Answer:

Cash $   5710

Total   debit side  $  199200 Credit side  $ 199200

Explanation:

We list the correct accounts at the right side. First we add up the credit side to find the total and then subtract the debit side from it to get the cash amount as the debit and credit side of the trial balance must be equal.

<u><em>Splish Brothers, Inc.</em></u>

<u><em>Adjusted trial balance </em></u>

<u><em>December 31, 2017.</em></u>

                                                              Debit                   Credit

Cash $                                                    5710

Supplies                                               1,330

Accounts Receivable                         3,580

Prepaid Insurance                             2,620

Equipment                                          80,160

Accumulated Depreciation—Equipment                        $20,100

Trademarks                                         3,760

Accounts Payable                                                             3,220

Salaries and Wages Payable                                               920

Unearned Service Revenue                                               1,060

Bonds Payable (due 2024)                                                31,880

Common Stock                                                                    2,120

Additional paid-in capital                                                    15,160

Retained Earnings                                                              14,720

Service Revenue                                                                30,040

Salaries and Wages Expense          14,080

Insurance Expense                           2,400

Rent Expense                                    3,260

<u> Interest Expense                              2,320                                              </u>

<u>Total                                         $  199200                             $ 199200</u>

<u></u>

7 0
3 years ago
How can business apply force field technique in the workplace
FinnZ [79.3K]

Companies can apply the force field technique in the workplace by establishing a method of observing the factors that drive or block the achievement of goals.

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It helps in the identification and more comprehensive analysis of the organizational environment and its processes, helping in decision making and in the strategic formulation to reduce bottlenecks and obtain quality.

Therefore, the force field technique helps in the effectiveness of processes, develops communication, reduces resistance to change in addition to creating a positive culture for development.

Find out more about force field technique here:

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8 0
2 years ago
What is the difference between a monopolistically competitive demand curve and a perfectly competitive demand curve
shtirl [24]
The demand curve for a perfectly competitive firm is completely elastic and a horizontal line. Monopolistically competitive demand curve is downward sloping and is more elastic than monopoly because there are more substitutes.
4 0
2 years ago
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