Alpha Communications, Inc., which produces telecommunications equipment in the United States, has a very strong local market for its circuit board. The variable production cost is $130, and the company can sell its entire supply domestically for $170. The U.S. tax rate is 40 percent. Alternatively, Alpha can ship the circuit board to its division in Germany, to be used in a product that the German division will distribute throughout Europe. Information about the German product and the division’s operating environment follows.

Selling price of final product: $360
Shipping fees to import circuit board: $20
Labor, overhead, and additional material costs of final product: $115
Import duties levied on circuit board (to be paid by the German division): 10% of transfer price
German tax rate: 60%

Assume that U.S. and German tax authorities allow a transfer price for the circuit board set at either U.S. variable manufacturing cost or the U.S. market price. Alpha’s management is in the process of exploring which transfer price is better for the firm as a whole.

Required:
1. Compute overall company profitability per unit if all units are transferred and U.S. variable manufacturing cost is used as the transfer price. Show separate calculations for the U.S. operation and the German division.
2. Repeat requirement (1). assuming the use of the U.S. market price as the transfer price. Which of the two transfer prices is better for the firm?
3. Assume that the German division can obtain the circuit board in Germany for $155.

a. If you were the head of the German division, would you rather do business with your U.S. division or buy the circuit board locally? Why?
b. Rather than proceed with the transfer, is it in the best interest of Alpha to sell its goods domestically and allow the German division to acquire the circuit board in Germany? Why? Show computations to support your answer.

Answer:

1-If the transfer price is set equal to the U.S. variable manufacturing cost, Alpha Communications will have a profit of $32.80 per circuit board with US Share as $0 and German Share as $32.80.

2-If the transfer price is set equal to the U.S. market price, Alpha Communications will have a profit of $39.20 per circuit board with US Share as $24 and German Share as $15.20. The transfer price as US market price is more effective for the Alpha Communications.

3:a- If the German division can obtain the boards in Germany for 155, it is better for the German division because due to lack of additional shipping fee and import duty, this price is more feasible for the German division.

3:b- If the company decide to sell the US circuit boards locally and allow German division to obtain the circuit boards in Germany, then Alpha Communication will have a profit of $60 per circuit board with US Share as $24 and German Share as $36.

Explanation:

1-If the transfer price is set equal to the U.S. variable manufacturing cost, Alpha Communications will have a profit of $32.80 per circuit board. The calculations are as follows:

US Operation:

Sales Revenue(Price set to variable manufacturing cost): $130

Variable Manufacturing Cost:                                              : ($130)

_________________________________________________

Contribution Margin                                                            : $ 0

German Operation:

Selling Price:                                                                         $360

Transfer Price:                                                                      ($130)

Additional Cost:                                                                    ($115)

Shippng Cost:                                                                       ($20)

Import Duty (10% of Transfer Price): 10% x 130=0.1x130=    ($13)

_________________________________________________

Income Before Tax:                                                             $82

Income Tax (60% of Income Before Tax):60%x82           ($49.20)

___________________________________________________

Income After Tax                                                                 $32.80

2-If the transfer price is set equal to the U.S. market price, Alpha Communications will have a profit of $39.20 per circuit board. The transfer price as US market price is more effective for the Alpha Communications. The calculations are as follows:

US Operation:

Sales Revenue(Price set to variable manufacturing cost): $170

Variable Manufacturing Cost:                                              : ($130)

_________________________________________________

Income Before Tax                                                                : $ 40

Income Tax (40% of Income Before Tax):40%x40              :($16)

_________________________________________________

Income After Tax:                                                                   : $24

German Operation:

Selling Price:                                                                         $360

Transfer Fee:                                                                        ($170)

Additional Cost:                                                                    ($115)

Shippng Cost:                                                                       ($20)

Import Duty (10% of Transfer Price): 10% x 170=0.1x170=    ($17)

_________________________________________________

Income Before Tax:                                                             $38

Income Tax (60% of Income Before Tax):60%x38           ($22.80)

___________________________________________________

Income After Tax                                                                 $15.20

Total Income By Alpha Communication: $24+$15.20=$39.20

3-a: If the German division can obtain the boards in Germany for 155, it is better for the German division because due to lack of additional shipping fee and import duty, this price is more feasible for the German division.

At the lower tranfer price of 130, the total impact of transfer is given by

Transfer Price:                                                                       $130

Shippng Cost:                                                                        $20

Import Duty (10% of Transfer Price): 10% x 130=0.1x130=    $13

___________________________________________________

Total Impact                                                                          $163

It is more than the local available price, Thus the company should purchase their circuit board locally.

3-b If the company decide to sell the US circuit boards locally and allow German division to obtain the circuit boards in Germany, then Alpha Communication will have a profit of $60 per circuit board.

US Operation:

Sales Revenue(Price set to variable manufacturing cost): $170

Variable Manufacturing Cost:                                              : ($130)

_________________________________________________

Income Before Tax                                                                : $ 40

Income Tax (40% of Income Before Tax):40%x40              :($16)

_________________________________________________

Income After Tax:                                                                   : $24

German Operation:

Selling Price:                                                                         $360

Local Circuit Board Price                                                     ($155)

Additional Cost:                                                                    ($115)

_________________________________________________

Income Before Tax:                                                             $90

Income Tax (60% of Income Before Tax):60%x38           ($54)

___________________________________________________

Income After Tax                                                                 $36

Total Income By Alpha Communication: $24+$36=$60.0

Dinham Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During March, the kennel budgeted for 3,700 tenant-days, but its actual level of activity was 3,740 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Fixed element per month Variable element per tenant-day Revenue - $ 34.60 Wages and salaries $ 2,600 $ 7.60 Food and supplies 1,600 14.10 Facility expenses 8,100 3.10 Administrative expenses 6,600 0.10 Total expenses $ 18,900 $ 24.90 Actual results for March: Revenue $ 125,356 Wages and salaries $ 28,560 Food and supplies $ 54,875 Facility expenses $ 19,150 Administrative expenses $ 7,096 The spending variance for food and supplies in March would be closest to:

Hoda is creating a report in Access using the Report Wizard. Which option is not available for adding fields using the wizard?

Tables
Queries
Reports
All are available options.

Someone who gives money or goods to an organization
A. Donor
B. Provider

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a. Taxable income
b. Income tax payable
c. Income tax expense
d. Net income

Oriole Corporation has retained earnings of $682,100 at January 1, 2020. Net income during 2020 was $1,558,700, and cash dividends declared and paid during 2020 totaled $81,300. Prepare a retained earnings statement for the year ended December 31, 2020. Assume an error was discovered: land costing $89,160 (net of tax) was charged to maintenance and repairs expense in 2019.

Jayden, a calendar year taxpayer, paid $16,000 in medical expenses and sustained a $20,000 casualty loss in 2020 (the loss occurred in a Federally declared disaster area). He expects $12,000 of the medical expenses and $14,000 of the casualty loss to be reimbursed by insurance companies in 2021. Before considering any limitations on these deductions, how much can Jayden include in determining his itemized deductions for 2020

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Scarcity occurs when supply exceeds demand.
True of False

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Fixed overhead will not be affected by whether or not the special order is accepted.

1. What are the relevant costs and benefits of the two alternatives (accept or reject the special order)?

a. Special order price, direct materials, direct labor, and variable overhead.
b. Special order price, direct materials, direct labor, variable overhead, and fixed overhead
c. Normal price, direct materials, direct labor, and variable overhead.
d. Normal price, direct materials, direct labor, variable overhead, and fixed overhead.

2. By how much will operating income increase or decrease if the order is accepted?
a. increase by $_______
b. decrease by $_________

Which of the following is NOT an example of fixed expenses?

Select the best answer from the choices provided.
A.
Health insurance premium

B.
Interest on college loans

C.
Apartment Rent

D.
The amount of gas to fill up your tank

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B. Ordered store fixtures costing $10,000.
C. Borrowed $16,000 cash and signed a note due in two years.
D. Purchased $18,000 of equipment, paying $1,400 in cash and signing a six-month note for the balance.
E. Lent $1,700 to an employee who signed a note to repay the loan in three months.
F. Received and paid for the store fixtures ordered in (b).
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Prepare journal entries for each transaction.

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an increase in the cost of farm equipment
a rise in demand for organic produce
an increase in customers at the market
a change in the market price for non-organic fruit
a sale on organic meats at the market

(answer is abc)

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Job 306 Job 307 Job 308
Balances on March 31
Direct materials $ 31,000 $ 37,000
Direct labor 21,000 18,000
Applied overhead 10,500 9,000
Costs during April
Direct materials 135,000 200,000 $ 115,000
Direct labor 102,000 153,000 104,000
Applied overhead ? ? ?
Status on April 30 Finished (sold) Finished (unsold) In process
a. Materials purchases (on credit).
b. Direct materials used in production.
c. Direct labor paid and assigned to Work in Process Inventory.
d. Indirect labor paid and assigned to Factory Overhead.
e. Overhead costs applied to Work in Process Inventory.
f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.)
g. Transfer of Jobs 306 and 307 to Finished Goods Inventory.
h. Cost of goods sold for Job 306.
i. Revenue from the sale of Job 306.
j. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)
2. Prepare journal entries for the month of April to record the above transactions.
Transaction General Journal Debit Credit
a. Raw materials inventory 560,000
Accounts payable 560,000
b. Work in process inventory 450,000
Raw materials inventory 450,000
c. Work in process inventory 359,000
Cash 359,000
d. Factory overhead 23,000
Cash 23,000
e. Work in process inventory
Factory overhead
f(1). Factory overhead
Raw materials inventory
f(2). Factory overhead 24,000
Cash 24,000
f(3). Factory overhead 56,000
Accumulated depreciation-factory equipment 56,000
f(4). Factory overhead 39,000
Cash 39,000
g. Factory overhead
Work in process inventory
h. Cost of goods sold
Finished goods inventory
i. Cost of goods sold
Finished goods inventory
j. Cost of goods sold
Factory overhead

Q4) The price of a luxury car increased from 42.000 euros to 44.000 euros. Then the demand for
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This entire rach of children's clothes has a 25% off sign. Can you tell me how much this coat is with the discount? It's priced at $54.99?

which of the following is a reason to approach smaller banks for a business loan



​

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How many of each type of lamp must be sold to optimize total contribution margin?

a. 90,000 classic lamps; 0 fancy lamps
b. 0 classic lamps; 9,000 fancy lamps
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Required:
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has any questions or problems.
4. It is the development of an ongoing connection between a company and its customers. The
relationship involves marketing communications, sales support, technical assistance and
customer service​

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