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Division A makes a part with the following characteristics: $25 Production Capacity in Units 15 000 units Selling Price de Customers Variable Cost per Unt
Division A makes a part with the following characteristics: $25 Production Capacity in Units 15 000 units Selling Price de Customers Variable Cost per Unt $18 Tots con $60,000 Division B. another vision of the same company, would like to purchase 5,000 units of The part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $24 each Suppose that Division Als operating at capacity and can sell all of its output to outside customers at its usual selling price. If Division A sells the parts to Division B at 524 per unit (Division B's outside price), what will be the effect on the operating income of company as a whole? O A Higher by $5,000 each period. There will be no change in the status of the company as a whole O Lower by $15.000 each period, O Lower by $5,000 each period
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