1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
jenyasd209 [6]
2 years ago
6

An external competitor to Construction (from another island) is offering to build the new homes for $1300 each. Here are facts a

bout the each of the projects (incline, bridge, campground, new home) Construction is considering:
Revenue Variable Cost Incline $1,400 $600
Bridge $1,500 $950
Campground $2,700 $1,200
New Home ? $700

Island Evaluations only wants to hire one company to build all five homes. In other words, either Construction (internal) will build all five, or the competitor (from another island) will build all five new homes. Island Evaluations plans on selling the homes to new tenants for $2,500 each.

a) What is the minimum transfer price (per home) that Construction would be willing to accept?
b) What is the maximum transfer price (per home) Island Evaluations would be willing to accept?
Business
1 answer:
cupoosta [38]2 years ago
4 0

Answer:

a. The minimum transfer price (per home) that Construction would be willing to accept would be $1,270

b. The maximum transfer price (per home) Island Evaluations would be willing to accept would be $1,300

Explanation:

a. According to the given data If Construction accepts the proposal of Island Evaluations, then it has to foregone the profits which could have been earned if Construction accepted the proposal of local villagers to build an incline, a bridge and a campground.

Hence, minimum transfer price (per home) for Construction should be such that it covers the profit foregone as given above:

Now, profit foregone is calculated as per the table below:

Figures in $

Particulars Revenue Cost Profit

Incline        1400          600 800

Bridge         1500 950  550

Campground 2700 1200 1500

Total        5600 2750 2850

Therefore, the transfer price should be such which can generate a profit of $2,850 for Construction.

Therefore, total revenue which should be generated = Cost of building five new homes + Profit foregone

= 700*5 + 2850 = $6,350

Hence, minimum transfer price (per home) should be = 6350/5 = $1,270

b. The maximum transfer price (per home) that Island Evaluations will be willing to accept is $1,300 per home as quoted by the external competitor from another island.

You might be interested in
A customer tried to use a fake id during an insurance transaction and the agent had to file a Suspicious Activity Report under l
Vikentia [17]

Answer:

$ 10,000 USD

Explanation:

Insurance companies are obliged to report to the federal government through form 8300 about transactions that exceed $ 10,000 or even transactions of a lower value that for some reason arouse the impression of suspicious activity; since criminals are normally aware of this rule and try to avoid the law as much as possible. This arrangement has been proposed by the government to control illicit activity and to comply with the anti money laundering program.

4 0
3 years ago
The following data have been provided by Moretta Corporation, a company that produces forklift trucks: Budgeted production 3,400
zloy xaker [14]

Answer:

B) $135 F

Explanation:

The computation of the variable overhead efficiency variance for supplies cost is given below:

= (Actual hours - Standard hours) × Standard Rate

= (10,930 hours - 3,800 × 2.9 hours) × $1.50 per hour

= (-90 hours) × $1.50 per hour

= $135 favorable

Hence, the variable overhead efficiency variance for supplies cost is $135 favorable

Therefore the option b is correct

8 0
3 years ago
Graduate degrees in the fields of law, business, and medicine are considered to be
Ulleksa [173]
Graduate degrees in the fields of law, business, and medicine are considered to be

a. professional degrees
6 0
3 years ago
Read 2 more answers
In which situation is it acceptable for an it professional to access corporate secrets?
NNADVOKAT [17]

Answer:

the answer you have now is correct.

3 0
3 years ago
ProTech began business at the start of the current year. The company planned to produce 40,000 units, and actual production conf
Ulleksa [173]

Answer:

Net operating profit= $230,000

Explanation:

The absorption costing method includes all costs related to production, both fixed and variable. <u>The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead. </u>

<u></u>

<u>First, we need to calculate the unitary cost:</u>

Unitary production cost= 19 + (240,000/40,000)

Unitary production cost= $25

<u>Now, the income statement:</u>

Sales= 37,000*42= 1,554,000

COGS= (37,000*25)= (925,000)

Gross profit= 629,000

Total selling and administrative cost= (7*37,000) + 140,000= (399,000)

Net operating profit= $230,000

5 0
3 years ago
Other questions:
  • One reason you should drive slowly around farm vehicles is:
    8·2 answers
  • China's steel industry:___________
    11·2 answers
  • The balance of payment account is made up of:
    9·1 answer
  • First City Bank pays 9 percent simple interest on its savings account balances, whereas Second City Bank pays 9 percent interest
    8·1 answer
  • GreenLawn Co. provides landscaping services to clients. On May 1, a customer paid GreenLawn $60,000 for 6-months services in adv
    5·1 answer
  • At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the following cost predictions: o
    6·1 answer
  • Sheffield Corp. makes and sells umbrellas. The company is in the process of preparing its Selling and Administrative Expense Bud
    15·1 answer
  • What does WMT mean in the stock market?
    14·1 answer
  • Most economists say a little inflation is healthy for an economy.
    14·1 answer
  • Woolsey Corporation, a U.S. company, expects to sell goods to a British customer at a price of 250,000 pounds, with delivery and
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!