ACCT 2302 Managerial Accounting
ACCT 2302 Managerial Accounting
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Exercise 22-11A Determining transfer prices LO C2
| The Trailer department of Baxter Bicycles makes bike trailers that attach to bicycles and can carry children or cargo. The trailers have a retail price of $98 each. Each trailer incurs $37 of variable manufacturing costs. The Trailer department has capacity for 26,000 trailers per year, and incurs fixed costs of $440,000 per year. |
| Required: |
| 1. | Assume the Assembly division of Baxter Bicycles wants to buy 5,900 trailers per year from the Trailer division. If the Trailer division can sell all of the trailers it manufactures to outside customers, what price should be used on transfers between Baxter Bicycle’s divisions? |
| 2. | Assume the Trailer division currently only sells 10,600 trailers to outside customers, and the Assembly division wants to buy 5,900 trailers per year from the Trailer division. What is the range of acceptable prices that could be used on transfers between Baxter Bicycle’s divisions? |
Problem 22-5A Manufacturing cycle time and efficiency LO A4
| Oakwood Company produces maple bookcases to customer order. It received an order from a customer to produce 5,000 bookcases. The following information is available for the production of the bookcases.
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| Process time | 9.0 | days |
| Inspection time | 1.4 | days |
| Move time | 3.7 | days |
| Wait time | 12.0 | days |
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| Required: | |
| 1. | Compute the company’s manufacturing cycle time. (Round your answers to 1 decimal place.) |
| 2. Compute the company’s manufacturing cycle efficiency. (Round your answers to 1 decimal place.) |
