Materials used by Jefferson Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of
material are transferred, with no reduction in Division A's current sales. How much would Jefferson's total income from operations increase?
A) $45,000
B) $120,000
C) $60,000
D) $150,000
A
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Clarion Corp invested cash in a 6-month certificate of deposit (CD) on November 1, 2015 . If Clarion Corp has an accounting period that ends on December 31, 2015, when should Clarion recognize interest revenue from the CD?
a. On December 31, 2015 only b. On May 1, 2016 only c. Both December 31, 2015 and May 31, 2016 d. On the date when its income tax return is filed
Which statement is correct?
a. in a normalized database, data about vendors occur in several locations b. the accountant is responsible for database normalization c. in a normalized database, deletion of a key record could result in the destruction of the audit trail d. connections between M:M tables are provided by a link table
Lopar Company uses a predetermined overhead rate based on direct labor dollars. Lopar Company estimated that its 2010 overhead would total $938,000 and that 2010 direct labor costs would be $670,000 . During 2010, actual overhead costs were $960,000, and actual direct labor costs were $700,000 . By how much was Lopar's overhead over- or underapplied?
a. $20,000 overapplied b. $20,000 underapplied c. $18,000 overapplied d. $10,000 underapplied
Jane and Don own a ski chalet in Lake Tahoe, NV and rented it for 12 days for $8,000. The rest of the year, the chalet was used by them and their friends and family. What is the proper tax treatment of the $8,000?
A. The amount should be reported as other income on Form 1040 B. Should be reported on Schedule E C. None of the rental income is included in gross income D. The amount should be reported on Schedule C