Tortilla's, Inc. manufactures electronics. It consists of several divisions operating as profit SBU's. Division A desires to purchase materials from Division B at a price of $85 per unit. Division B can produce 25,000 units at full capacity, and is currently operating at 90% capacity. Currently, it sells only to outside customers. It's customers pay $115 per unit. It incurs variable costs of $80 per unit. Currently, Division A pays an outside company $110 per unit. If Division A purchased from Division B, B's variable costs would be $10 less because it would save money on marketing costs. Division A requires 10,000 units.

From Tortilla's, Inc's perspective the net benefit (cost) is?

A. Net benefit of $100,000.

B. Net benefit of $128,750.

C. Net benefit of $150,000.

D. Net cost of $100,000.

Answer rating: 100% (QA)

C Net benefit of 150000 WORKINGS Unit price to A from B 85 Un... View the full answer