Question: Division A makes a part with the following characteristics Production capacity in units Selling price to outside customers Variable cost per unit Total fixed costs

 Division A makes a part with the following characteristics Production capacityin units Selling price to outside customers Variable cost per unit Total
fixed costs 30,600 units $ 20 $ 13 $ 109,000 Division B.
another division of the same company, would like to purchase 15700 units

Division A makes a part with the following characteristics Production capacity in units Selling price to outside customers Variable cost per unit Total fixed costs 30,600 units $ 20 $ 13 $ 109,000 Division B. another division of the same company, would like to purchase 15700 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $16 each Suppose that Division A hos ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division A refuses to accept the $16 price internally and Division B continues to buy from the outside supplier, the company as a whole will be worse off by $109,900 each period. worse off by $125,600 each period, D worse off by $62.800 each period worse off by $47100 each period

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