The Following Segment Reporting Statement Includes Salamander Company's Expected Results

question 91

Essay

The following segment reporting statement includes Salamander Company's expected results for the coming period:
$\begin{array}{c}\text{Salamander Company}\\\text{ Segment Reporting Statement}\\\begin{array}{lcc}&\text{Division A }&\text{Division B}\\\text { Sales A: }(10,000 \times \$ 160)&\$1,600000\\ B: (25,000 \times \$ 72) & &\$ 1,800,00 \\\text{Variable costs} &\underline{1,360,000}&\underline{900,000} \\\text{ Contribution margin} &\$240,000 &\$900,000 \\\text{Fixed costs}&\underline{160,000}&\underline{ 360,000} \\\text{Profit}&\underline{ \$80,000}&\underline{ \$540,000 }\\\end{array}\end{array}$

Included in Division A's costs are 10,000 units of a subcomponent purchased from an outside supplier for $45. The managers have recently initiated negotiations for Division B to supply the components to Division A. Division B has a total capacity of 40,000 units.
Required:
(a) Prepare a new segment reporting statement for the Salamander Company, assuming an internal transfer at the maximum transfer price.
(b) Prepare a new segment reporting statement for the Salamander Company, assuming an internal transfer at the minimum transfer price.

Recognize various models and approaches used in aggregate planning.

Identify and explain the process and importance of disaggregation in planning.

Comprehend how yield management strategies apply to business scenarios with specific cost structures.

Analyze how demand fluctuation impacts aggregate planning and the applicability of different strategies.

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Definitions:

Glycemic Index

A system that ranks foods on a scale from 0 to 100 based on how much they raise blood sugar levels after eating.

Type 2 Diabetes Mellitus

A long-term metabolic disorder characterized by high blood sugar, insulin resistance, and relative lack of insulin, commonly associated with obesity and physical inactivity.

Model of Clinical Judgment

A framework used by healthcare professionals to understand and explain the process of making informed decisions and diagnoses in clinical settings.

Tanner's Model

A scale of physical development in children, adolescents, and adults which defines physical measurements of development based on external primary and secondary sex characteristics.