Barossa Bicycle Company Makes Bicycles Required:
Calculate the Operating Profit for Each Division and the and the Assembly

question 28

Essay

Barossa Bicycle Company makes bicycles.The Frame Division manufactures the frames and the Assembly Division makes the finished bicycles.The frames can be sold separately for $500.The bicycles sell for $750.The information related to manufacturing for 2017 is as follows:
$$\begin{array} { | l | r | } \hline \text { Frame Division manufacturing costs } & \$ 12000000 \\\hline \text { Sales of frames by Frame Division } & 8000000 \\\hline \text { Market value of frames transferred to Assembly } & 12000000 \\\hline \text { Sales of bicycles by Assembly Division } & 14400000 \\\hline \text { Additional manufacturing costs of Assembly Division } & 3000000 \\\hline\end{array}$$
Required:
Calculate the operating profit for each division and the company as a whole.Use market value as the transfer price.Will all of the managers be happy with this concept? Explain.
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Definitions:

Skewed

A description of data or distribution that is not symmetrical, leaning more heavily to one side, either to the right or left.

Symmetric

Having proportions that are well balanced or proportions that mirror each other on either side of a central axis.

Distribution Shape

The form or appearance of the graphical representation of a dataset, indicating how data is dispersed or spread.

Standard Deviation

A statistic that quantifies the dispersion or spread of a set of numerical data from its mean.