Question

55. Altoona Corporation has two divisions, Hinges and Doors, which are both organized as profit centers;...

55. Altoona Corporation has two divisions, Hinges and Doors, which are both organized as profit centers; the Hinge Division produces and sells hinges to the Door Division and to outside customers. The Hinge Division has total costs of $43, $26 of which are variable. The Hinge Division is operating significantly below capacity and sells the hinges for $58.
The Door Division has received an offer from an outsider vendor to supply all the hinges it needs (32,000 hinges) at a cost of $53. The manager of the Door Division is considering the offer but wants to approach the Hinge Division first.

What is the minimum transfer price from the Hinge Division to the Door Division?

$53.

$26.

$43.

$58.

56. Riff, Inc. is working on its cash budget for June. The budgeted beginning cash balance is $20,000. Budgeted cash receipts total $192,000 and budgeted cash disbursements total $191,000. The desired ending cash balance is $48,000. The excess (deficiency) of cash available over disbursements for June will be:

$19,000.

$212,000.

$21,000.

$1,000.

57. Data on Gantry Company's direct-labor costs are given below:

Standard direct-labor hours 40,000
Actual direct-labor hours 39,000
Direct-labor efficiency variance-favorable $ 3,400
Direct-labor rate variance-favorable $ 7,800
Total direct labor payroll $ 124,800

What was Gantry's actual direct-labor rate?

$3.00.

$3.20.

$3.40.

$7.80.

Homework Answers

Answer #1
55 $53
Maximum price would be the market price the buyer would pay: $53
Because the Hinge Division is operating significantly below capacity
and their variable cost is recovered in this.
56 $21,000
Cash balance, beginning 20000
Add cash receipts as all sales are for cash 192000
Total cash available 212000
Less cash disbursements -191000
Excess (deficiency) of cash available over disbursements 21000
Financing 27000
Cash balance, ending 48000
57 $3.20
Total direct labor payroll / Actual direct-labor hours
$124,800 / 39,000
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