Problem I ? Cost Decisions SEE ATTACH FILE! The Nicholson and Cage Divisions are in the same company. Currently the Cage Division buys from the Nicholson Division for $82 per unit. The Nicholson Division wants to increase the price part to $94 per unit. Cage Division can buy the part for $88 from an outside supplier. The cost the part obtained from the Nicholson Division is below: Direct materials $25.50 Direct labor 32.50 Variable indirect production 22.50 Fixed indirect production 9.60 If Nicholson does not provide the parts to Cage, it will one-fourth of the fixed cots. The Nicholson Division has excess capacity but no alternative uses of the facility Required: From the standpoint of the company as a whole, should Cage Division continue to Nicholson Division? Hint: Determine the avoidable unit cost to make the part in Please show your work step by step!

Problem I - Cost Decisions The Nicholson and Cage Divisions are in the same company. Currently the Cage Division buys from the Nicholson Division for $82 per unit. The Nicholson Division wants to increase the price part to $94 per unit. Cage Division can buy the part for $88 from an outside supplier. The cost the part obtained from the Nicholson Division is below: Direct materials $25.50 Direct labor 32.50 Variable indirect production 22.50 Fixed indirect production 9.60 If Nicholson does not provide the parts to Cage, it will onefourth of the fixed cots. The Nicholson Division has excess capacity but no alternative uses of the facility Required: From the standpoint of the company as a whole, should Cage Division continue to Nicholson Division? Hint: Determine the avoidable unit cost to make the part in Please show your work step by step