Internal or External Sales. Wittkamp Company has the capacity to manufacture 700 units of parts used in machine tool production. These parts are manufactured in batch lots of 100 units each. Division A makes these parts at a uniform variable cost of \(\$ 5\) per unit. The manufactured batches can be sold either to outside customers or to Division B where the parts are used in machine tool assembly.

Data with respect to prices per batch from outside sales are given below along with prices charged to outsiders after further processing in Division B:

\section*{Required:}
Decide which batches should be sold after production in Division A and which batches should be transferred to Division B for further processing. Show computations.

Transcribed Image Text:

Batch No. Division A Price to Outside Customers Division B Price to Outside Customers After Additional Processing Division B Additional Processing Costs Per Batch 1 $16 $35 $13 234567 2 15 32 13 3 14 30 13 4 13 26 12 5 12 22 12 6 11 7 10 220 12 11