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Big and Little are both divisions in a large, multinational corporation. Each division operates independently. Both division make and market the same product, but they
Big and Little are both divisions in a large, multinational corporation. Each division operates independently. Both division make and market the same product, but they operate in different geographic regions. Selected information for the most recent month for the two divisions follows: Division SP Units produced Units sold Unit cost Variable costing) Unit cost (absorption costing) Break even point (in units) DOL INI Big $42 86,000 85,000 $31 $36 4,125 2.45 $423,400 Little $45 38,600 35,400 $28 $37 6,320 2.77 $185,300 Discuss the risk of the two divisions. Do not do computations. Assume the amounts provided are correct. State which division is more risky and support your
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