Question
Division A makes a part with the following characteristics: Production capacity in units Selling price to outside customers. Variable cost per unit Total fixed
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 32,900 units. $ 22 $ 18 $ 103,400 Division B, another division of the same company, would like to purchase 15,200 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $20 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 $20 per unit, the company as a whole will be
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