Question: Question 6 (2 points) Division X makes a part with the following characteristics: Production capacity. .. 25,000 units Selling price to outside $18 Variable cost
Question 6 (2 points) Division X makes a part with the following characteristics: Production capacity. .. 25,000 units Selling price to outside $18 Variable cost per uni. Fixed cost, .. $100,000 Division Y of the same company now purchases the part from an outside supplier at a price o $17 each, but would like to purchase 10,000 units each period from Division X. Suppose tha Division X is operating at capacity and can sell all of its output to outside customers. If Division X sells the parts to Division Y at $17 per unit, the company as a whole will be: Better off by $10,000 each period Worse off by $20,000 each period Division X makes a part with the following characteristics: Production capacity 25,000 units Selling price to outside customers.... $18 Variable cost per Fixed cost, tota!. $100,000 Division Y of the same company now purchases the part from an outside supplier at a price of $17 each, but would like to purchase 10,000 units each period from Division X. Suppose that Division X is operating at capacity and can sell all of its output to outside customers. If Division X sells the parts to Division Y at $17 per unit, the company as a whole will be: Better off by $10,000 each period Worse off by $20,000 each period Worse off by $10,000 each period There will be no change in the status of the company as a whole
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