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Any help would be appreciated, thanks! The Fair Play Division of Fast Company (the parent company) produces wheels for off- road sport vehicles. One-half of

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The Fair Play Division of Fast Company (the parent company) produces wheels for off- road sport vehicles. One-half of Fair Play's output is sold to the Glow Division of Fast; the remainder is sold to outside customers. Fair Play's estimated operating profit for the year is: Sales Variable costs Fixed costs Operating profits Unit sales Internal Sales $ 300,000 200,000 60,000 External Sales $ 400,000 200,000 60,000 S 140,000 20,000 40,000 20,000 Unless otherwise stated assume the fixed costs given above are unavoidable. Glow Division has an opportunity to purchase 20,000 wheels of the same quality from an outside supplier on a continuing basis for $12.50 per wheel. Q6. If the maximum demand for the Fair Play Division's wheels in the external market is 20,000 units, what would be the Fair Play Division's total operating profits if the Fast Company allows Glow Division to purchase the wheels from the outside supplier? By how much would the Glow Division's profits increase in total) if it is allowed to purchase the wheels externally? What would be the net effect on Fast Company's total profits? Indicate an increase in profits with a positive number and a decrease inprofits with a negative number, e.g. - 10000. Assume the Fair Play Division has excess production capacity but cannot sell any additional products to external customers. What is the minimum selling price per unit that Fair Play could accept from the Glow Division? Q7

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