Question
Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division's return on investment
Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division's return on investment (ROI). Assume the following information relative to the two divisions: Case 2 3 Alpha Division: Capacity in units 89,000 409,000 159,000 309,000 Number of units now being sold to outside customers 89,000 409,000 109,000 309,000 Selling price per unit to outside customers $ 48 $ 108 $ 120 $ 68 Variable costs per unit $ 36 $ 83 $ 85 $ 44 Fixed costs per unit (based on capacity) $ 6 $ 15 $ 20 $ 9 Beta Division: Number of units needed annually 14,000 39,000 29,000 121,800 Purchase price now being paid to an outside supplier $ 45. $ 107 $120 "Before any purchase discount.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started