Note: Answers may vary slightly due to rounding.
0.5 + 0.3
0.1 + 0.1
(Note that the use of Maintenances costs by
a. The minimum transfer price that the Corporate Division should obtain is $600 per
hour, the market price for these services.
b. The maximum transfer price that the Government Division should pay is $200 per
hour, the cost of the best alternativ
a. Variable cost:
(AP x AQ)
(SP x AQ)
Allowed for Good
(SP x SQ)
$2.70 x 192,000
$3.00 x 192,000
$3 x 4 lbs x 46,000
a. $40. Manufacturing is operating below capacity, so the optimal transfer price is the
variable cost. The Assembly order will not exceed the current capacity.
b. $100. Manufacturing is operating at capacity. For each unit shipped to Assembly,
a. Different prices:
(1) The opportunity cost might be considered the regular fare of $2.00 less the $0.50
(2) The full cost is $4.00 less the $0.50 fee collected.
(3) One might suggest that if the transit vehicles are not running
Excel-assisted HW 3: Capital Budgeting Case for Expansion
Prior to starting this assignment, study the appendix to the text titled "Capital Investment
Decisions: An Overview." Next, go to the Homework section of the course website and
a. Computing overhead allocation rates
Processing orders. No. of orders
Setting up production.
No. of runs
Using machines. Machine-hrs.
Chapter 1 Matching Word Exercise
A transaction tax levied by the U.S. government on the purchase of fuel, telephone use, and air travel.
A measure of a person's ability to pay a tax.
The class of property that does not include buildings, land, an
Chapter 11 ~ Service Department and Joint Cost Allocation
Solutions to Exercises
11-21. (15 min.) Why Costs Are AliocatedwEthicai Issues: Giga-Corp.
The president of Stable Division vvouid probabiy prefer to allocate Personnel costs
on turnover. Yo
11-21. Why Are Costs Allocated?Ethical Issues
You are the division president of Stable Division of Giga-Corp. Your friend, Ligia, is the division president
of Giga-Corp.'s Turmoil Division. These are the only divisions. Each division has 5,000 employees.
Example for Adjusting Exponential Smoothing for Trend