Question
Div A's unit cost data is below. Div B has been purchasing 1,000 units of the same part for $215.00 from another vendor and has
Div A's unit cost data is below. Div B has been purchasing 1,000 units of the same part for $215.00 from another vendor and has offered Div A a price of $160.00 for 1,000 units. Div A's normal selling price is $210.00. Div A's capacity is 15,000 units and current sales to outside customers is 14,500 units. Will Div A accept the offer from Div B? DM $60.00 DL 30.00 VOHD 15.00 FOHD 24.00 Variable selling 45.00 Fixed selling 9.00 A: No, because Div A's income will decrease by $23.00 per unit. B: Yes, because the company expects Div A to support Div B. C: Yes, because Div A's income will increase by $20.00 per unit. D: No, because Div A's income will decrease by $50.00 per unit. E: No, because Div A's income will decrease by $20.00 per unit.
(Please show your work/explain)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started