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Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow.

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Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow. Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity) $ 72 $ 54 $ 8 25,000 Capacity in units Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 5,000 speakers per year. It has received a quote of $69 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits.

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