Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation.Marley's ManufacturingIncome StatementMonth Ending August 31, 2018 Dept. ADept. BSales$21,000 $52,000 Cost of goods sold9,870 27,040 Gross profit$11,130 $24,960 Expenses: Utility expenses$840 $3,120 Wages expense5,040 10,920 Costs allocated from corporate2,100 14,560 Total expenses$7,980 $28,600 Operating income/(loss) in dollars$fill in the blank 1 $fill in the blank 2 Operating income/(loss) in percentagefill in the blank 3%fill in the blank 4%Department B had an operating loss. Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A,which sells only to department B (they have no outside sales). After calculating the operating income indollars and operating income in percentage, analyze the following financial information to determinecosts that may need further investigation.Marley's ManufacturingIncome StatementMonth Ending August 31, 2018Dept. ADept. BSales$21,000$52,000Cost of goods sold9,87027,040Gross profit$11,130$24,960Expenses:Utility expenses$840$3,120Wages expense5,04010,920Costs allocated from corporate2,10014,560Total expenses$7,980$28,600Operating income/(loss) in dollarsOperating income/(loss) in percentage%%

Cost of goods sold: It is the cost of the direct materials used in the production of goods.

Answered: Marley's Manufacturing Income Statement…

Principles of Accounting Volume 2

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Author:OpenStax

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Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 5EA: Assume you are the department B manager for Marleys Manufacturing. Marleys operates under a...

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Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation.

Marley's Manufacturing Income Statement Month Ending August 31, 2018
	Dept. A	Dept. B
Sales	$21,000		$52,000
Cost of goods sold	9,870		27,040
Gross profit	$11,130		$24,960
Expenses:
Utility expenses	$840		$3,120
Wages expense	5,040		10,920
Costs allocated from corporate	2,100		14,560
Total expenses	$7,980		$28,600
Operating income/(loss) in dollars	$fill in the blank 1		$fill in the blank 2
Operating income/(loss) in percentage	fill in the blank 3	%	fill in the blank 4	%

Department B had an operating loss.

Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-
based transfer structure. Assume you receive the majority of your raw materials from department A,
which sells only to department B (they have no outside sales). After calculating the operating income in
dollars and operating income in percentage, analyze the following financial information to determine
costs that may need further investigation.
Marley's Manufacturing
Income Statement
Month Ending August 31, 2018
Dept. A
Dept. B
Sales
$21,000
$52,000
Cost of goods sold
9,870
27,040
Gross profit
$11,130
$24,960
Expenses:
Utility expenses
$840
$3,120
Wages expense
5,040
10,920
Costs allocated from corporate
2,100
14,560
Total expenses
$7,980
$28,600
Operating income/(loss) in dollars
Operating income/(loss) in percentage
%
%

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