Question: Colonial Computing Systems #56 & 57 Colonial Computing Systems manufactures and sells various computer products and has two decentraiized divisions: (1) Production and (2) Marketing.
Colonial Computing Systems #56 & 57 Colonial Computing Systems manufactures and sells various computer products and has two decentraiized divisions: (1) Production and (2) Marketing. The Marketing Division has always purchased a particular mouse from Production at $50 per unit. The Production Division is considering raising the price to $60 per unit. The Production Division's costs related to the mouse production is as follows: Variable costs per unit: Monthly fixed costs: S50 S10,000 The Marketing Division handles the promotion and distribution of the mouse purchases from the Production Division and sells each mouse for $100. Marketing Division incurs monthly fixed costs of $5,000. Marketing Division sells 1,500 units per month. Marketing Division can buy the same mouse from outside suppliers for S60. If the Marketing Division purchases the mouse from outside suppliers, the facilities the Production Division uses to manufacture the mouse would remain idle
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