b)

Assume that FrameBody does not have excess capacity and therefore would lose sales if the frames were sold to the Cycle Division. If the Cycle Division buys 1,070 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Question 3 The Cycle Division of Ayala Company has the following per unit data related to its most recent cycle called Roadbuster Selling price $2,120 Variable cost of goods sold Body frame $309 1,205 Other variable costs 896 Contribution margin $915 Presently, the Cycle Division buys its body frames from an outside supplier. However Ayala has another division,, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $345 per frame. The variable cost for FrameBody is $255. The Cycle Division is willing to pay $280 to purchase the frames from FrameBody (a) Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,070 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) (1) Effect on the income of the Cycle Division (2) Effect on the income of FrameBody (3) Effect on the income of Ayala By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Attempts: 0 of 3 used