Check my work Truball Inc., which manufactures sports equipment, consists of several operating divisions. Division A has decided to go outside the company to buy materials since division B plans to increase its selling price for the same materials to $200. Information for division A and division B follows: 0.22 points Outside price for materials Division A's annual purchases Division B's variable costs per unit Division B's fixed costs, per year Division B's capacity utilization $195 14,500 units $185 $1,340,000 100% eBook References Required: 1. Assume that division B cannot sell its materials to outside buyers. Calculate the net cost or benefit to the company as a whole if Division A purchases the materials outside the company. 2-a. Assume that division B can save $235,000 in fixed costs if it does not manufacture the material for Division A. Calculate the net cost or benefit to the company as a whole for A to purchase outside the company. 2-b. From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market? 3-a. Assume the situation in Requirement 1. If the outside market value for the materials drops $12, calculate the net cost or benefit to the company as a whole for A to purchase outside the company. 3-b. From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market? Req 1 Req 2A Req 2B Req Req 3B Assume that division B cannot sell its materials to outside buyers. Calculate the net cost or benefit to the company as a whole if Division A purchases the materials outside the company. (Enter all the amounts as positive value.) Req 2A > Net benefit to the company as a whole from buying outside Net cost to the company as a whole from buying outside Req 1 Req 2A Req 2B Req 3A Req 3B Assume that division B can save $235,000 in fixed costs if it does not manufacture the material for Division A. Calculate the net cost or benefit to the company as a whole for A to purchase outside the company. (Enter all the amounts as positive value.) Req 2B > Net benefit to the company as a whole for A to buy outside Net cost to the company as a whole for A to buy outside From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market? OYes IONO Assume the situation in Requirement 1. If the outside market value for the materials drops $12, calculate the net cost or benefit to the company as a whole for A to purchase outside the company. (Enter all the amounts as positive value.) Req 3B > Net benefit to the company as a whole for A to buy outside Net cost to the company as a whole for A to buy outside From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market? Yes
