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3) 10%-XYZ Corporation is a company with two divisions, Division A manufactures a product that has a variable cost of S6, sales price to the
3) 10%-XYZ Corporation is a company with two divisions, Division A manufactures a product that has a variable cost of S6, sales price to the market of S12 and has a capacity to produce 30,000 units and its fixed costs are S60,000. Current production is 20,000 units a) 506-Division B wants to purchase from Division A 5000 units at $7 per unit. Currently it pays S10 per unit to purchase these units from the market. What would you advise the company and Division A to do and why? Support your answer with calculations b) 5%-If an outside company wanted to purchase the 5000 units for $7, what would you advise the company and Division A to do? Support your answer with calculations
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