Mindoro Division of Calapan Industries manufactures furniture. Data on a sofa the division makes follows: mmmtium...

 

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Mindoro Division of Calapan Industries manufactures furniture. Data on a sofa the division makes follows: mmmtium Selling price per unit Variable cost per unit: Fabric P175 Other Variable Cost 400 Contribution Margin Required: P 900 P 575 P325 Mindoro buys the fabric from an outside supplier. The manager of Mindoro learns that Mactan Division of Calapan Industries makes a fabric that meets her requirements. Mactan sells the fabric to outside customers for P200. Variable cost to Mactan is P125. Mindoro's manager offers to buy the fabric at P150. a. What would happen to the income of Mactan Division? b. What would happen to the income of Mindoro Division? c. What would happen to the income of Calapan Industries? ==== 1. Assuming Mactan has no excess capacity and will lose outside sales if it supplies Mindoro: Mindoro Division of Calapan Industries manufactures furniture. Data on a sofa the division makes follows: mmmtium Selling price per unit Variable cost per unit: Fabric P175 Other Variable Cost 400 Contribution Margin Required: P 900 P 575 P325 Mindoro buys the fabric from an outside supplier. The manager of Mindoro learns that Mactan Division of Calapan Industries makes a fabric that meets her requirements. Mactan sells the fabric to outside customers for P200. Variable cost to Mactan is P125. Mindoro's manager offers to buy the fabric at P150. a. What would happen to the income of Mactan Division? b. What would happen to the income of Mindoro Division? c. What would happen to the income of Calapan Industries? ==== 1. Assuming Mactan has no excess capacity and will lose outside sales if it supplies Mindoro:

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a The income of Mactan Division would decrease because they would gain a lower price for their fab... View the full answer