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components COM 21, it manufactures at a price which would fetch a return of 25% on the average Problem 6: Division A of Better Margins Ltd. has been given a budgeted target of selling 2,00,000 assets employed by it. The following figures are relevant: If sal 1,30 divis Fixed overhead Prot mar Variable cost 24,00,000 31 per unit dis Average Assets: 22,00,000 Sales debtors 36,00,000 Stocks 34,00,000 Plant and other assets However, the marketing department of the company finds out by a survey that the maximum number of COM 21, the market can take at the proposed price is only 1,40,000 units. Fortunately, division B is willing to purchase the balance 60,000 units. The manager of division A is willing to sell to division B at a confessional price of 74 per unit. But the manager of division B is ready to pay 3 2.25 per unit, as he feels he can himself make CoM 21 in his division at that price. Rather than selling to division B at * 2.25 per unit, the manager of division A feels that he will restrict the activity of his division to the manufacture and sale of 1,40,000 components only. By this , he can reduce 7 80,000 in stocks, * 1,20,000 of plant and other assets and 40,000 in selling and administration expenses. As a management accountant, do you agree with the proposition of the manager of division A to restrict the activities to 1,40,000 components, from the overall interest of the organisation. Give detailed workings