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Captain Company Records Reveal the Following The Variable Costs of Division Y Will Be Incurred Whether

question 163

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Captain Company records reveal the following:  Division X Market price of finished component to outsiders $32 Variable costs per component 24 Contribution margin per component $8 Total contribution for 20,000 components $160,000\begin{array}{lr}\text { Division } \mathrm{X}\\\text { Market price of finished component to outsiders } & \$ 32 \\\text { Variable costs per component } & \underline{24} \\\text { Contribution margin per component } & \underline{\$ 8} \\\text { Total contribution for } 20,000 \text { components } & \$ 160,000\end{array}

 Division Y Sales price of finished product Variable costs: $42Division X 1 component @ $24)  Division Y $24 Assembly$9 Packaging41337Contribution margin per unit $5Total contribution for 20,000 units $100,000\begin{array}{ll}\text { Division Y }\\\text {Sales price of finished product Variable costs: } & &&\$42 \\\text {Division X 1 component @ \$24) } & \\\text {Division Y } & &\$24 \\\text { Assembly} & \$9 \\\text { Packaging} & 4&13&-37 \\\text {Contribution margin per unit } & &&\$5 \\\text {Total contribution for 20,000 units } & &&\$100,000 \\\end{array}
The variable costs of Division Y will be incurred whether it buys from Division X or from an outside supplier.The highest price that Division Y would want to pay Division X for the components would be _____.


Definitions:

Withdrawals

Money or assets taken out of a business by its owners for personal use.

Worksheet Income Statement

A simplified version of an income statement prepared within an accounting worksheet to calculate net income or loss.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, reflecting its nature in accounting.

Financial Statement

Reports that provide information about a company's financial condition, performance, and cash flows, including balance sheets, income statements, and more.

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