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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 Q 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 Q 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 $135,000. $225,000. $600,000. $750,000
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