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3) 11% - XYZ Corporation has a company with two divisions. Division A manufactures a product that has a variable cost of $6, sales
3) 11% - XYZ Corporation has a company with two divisions. Division A manufactures a product that has a variable cost of $6, sales price to the market of $12 and has a capacity to produce 30,000 units and its fixed costs are $60,000. Current production is 20,000 units. a) 6% - Division B of the same company wants to purchase from Division A 5000 units at $8 per unit. Currently it pays $10 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 $8, what would you advise the company and Division A to do? Support your answer with calculations.
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