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melamori03 [73]
3 years ago
12

Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its production. Bishop currentl

y is purchasing 24,000 units from an outside supplier for $15 per unit. Polk is currently operating at less than its full capacity of 590,000 units and has variable costs of $7 per unit. The full cost to manufacture the unit is $10. Polk currently sells 450,000 units at a selling price of $18 per unit.
a. What will be the effect on Avery Company’s operating profit if the transfer is made internally?
b. What is the minimum transfer price from Polk’s perspective?
c. What is the maximum transfer price from Bishop’s perspective?
Business
1 answer:
Aleksandr-060686 [28]3 years ago
3 0

Answer and Explanation:

a. The computation of operating profit is shown below:-

Profit per unit = Purchase price from outside per unit + variable cost of production internally

= $15 - $7

= $8

Total increment in operating profit = Profit per unit × Total number of units

= $8 × 24,000

= $192,000

b. Minimum transfer price = Variable cost = $7 (because polk has overcapacity and there is no change in fixed cost and polk minimum has to recover its variable production cost)

c. Maximum transfer price = purchase cost from outside supplier = $15 (because if the internal transfer piece is more than $15 Bishop will lose so he prefers to buy from outside and the company as a whole will lose $192,000 in incremental operating profit

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Answer:

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Pilot Error                           619

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The calculation of the relative frequency distribution is

Cause                          Relative Frequency           Result

Pilot Error                         619/2368 * 100              26.14%

Other human error           85/2368 * 100               3.59%

Weather                            574/2368 * 100             24.24%

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Total                                                                          100%

Conclusion: The most serious threat to aviation safety is the Pilot error as it has the highest frequency. Pilot need to be more equipped with understanding and knowledge of how to deal with unexpected event i.e. turbulence, engine failure among others..

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If Coca-Cola had all the human resources, operations, marketing, and accounting functions for the bottled water division at an o
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Answer:

product

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Question:

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