Question: Check my wor 3 Division A makes a part with the following characteristics: 27,800 units Production capacity in units Selling price to outside customers Variable


Check my wor 3 Division A makes a part with the following characteristics: 27,800 units Production capacity in units Selling price to outside customers Variable cost per unit Total fixed costs $ 19 13 $105,700 Division B, another division of the same company, would like to purchase 16,200 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $17 each. Suppose that Division A is operating at capacity and can sell all of its output to outside customers at its usual selling price. If Division A agrees to sell the parts to Division B at $17 per unit, the company as a whole will be Multiple Choice better off by $32,400 each period. There will be no change in the status of the company as a whole worse off by $64,800 each period worse off by $32,400 each period
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
