With the advent of NAFTA, Cranford Manufacturing has a U.S. division and a Mexico division. Each division
Question:
With the advent of NAFTA, Cranford Manufacturing has a U.S. division and a Mexico division. Each division builds specialty components that are used by both divisions. For each dollar in sales by the U.S. division, Mexico furnishes $0.20 in components, and for each dollar in sales of the Mexico division, the United States furnishes $0.05 in components. Each division uses $0.10 worth of their components in their own division.
1.Write the input-output matrix for this company. Make sure to order the matrix with U.S first, and then Mexico (in terms of rows and columns).
2.Find the value of the components each division must produce to support external sales of $200 million by the U.S. division and $180 million by the Mexico division. Give your answer in millions of dollars. Report only the number, not the units.
Accounting Texts and Cases
ISBN: 978-1259097126
13th edition
Authors: Robert Anthony, David Hawkins, Kenneth Merchant