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(Appendix 11A) Division P of Turbo Corporation has the capacity for making 75,000 wheel sets per year and regularly sells 60,000 each year on the
(Appendix 11A) Division P of Turbo Corporation has the capacity for making 75,000 wheel sets per year and regularly sells 60,000 each year on the outside market. The regular sales price is $100 per wheel set, and the variable production cost per unit is $65. Division 0 of Turbo Corporation currently buys 30,000 wheel sets (of the kind made by Division P) yearly from an outside supplier at a price of $90 per wheel set. Division 0 would like to buy the 30,000 wheel sets it needs annually from Division P at $87 per wheel set. What would be the change in annual operating income for the company as a whole, compared to what it is currently? Multiple Choice 0 $135000 $225,000. 0 0 $600,000 0 $750,000
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