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Division A makes a part with the following characteristics: Division A makes a part with the following characteristics Production capacity in units Selling price to
Division A makes a part with the following characteristics:
Division A makes a part with the following characteristics Production capacity in units Selling price to outside customers Variable cost per unit Total fixed costs 25,700 units $ 20 13 $104,400 Division B, another division of the same company, would like to purchase 19,500 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $17 each Suppose that Division A is operating at capacity and can sell all of its output to outside customers at its usual selling price. If Division A agrees to sell the parts to Division B at $17 per unit, the company as a whole will be: Multiple Choice There will be no change in the status of the company as a whole. better off by $58,500 each period. worse off by $58,500 each period worse off by $117,000 each periodStep by Step Solution
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