14.

Frocks and Gowns, Inc., has two divisions, Day Wear and Night Wear. The Day Wear Division has an investment base of $740,000 and produces (and sells) 105,000 units of Collars at a market price of $12.50 per unit. Variable costs total $5.30 per unit, and fixed charges are $4.50 per unit (based on a capacity of 125,000 units). The Night Wear Division wants to purchase 24,000 units of Collars from The Day Wear Division. However, the Night Wear Division is only willing to pay $9.00 per unit. What is the contribution margin for the Day Wear Division if it transfers 24,000 units to the Night Wear Division at $9.00 per unit?

$945,000.

$816,000.

$283,500.

$756,000.