Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A:

Selling price per circuit board	$183
Variable cost per circuit board	$121
Number of circuit boards:
Produced during the year	20,200
Sold to outside customers	15,200
Sold to Division B	5,000

Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic instrument manufactured by that division (one board per instrument). Division B incurred $290 in additional variable cost per instrument and then sold the instruments for $680 each.

Required:
1.	Prepare income statements for Division A, Division B, and the company as a whole.

2.

Assume that Division As manufacturing capacity is 20,200 circuit boards. Next year, Division B wants to purchase 6,000 circuit boards from Division A rather than 5,000. (Circuit boards of this type are not available from outside sources.) What should Division A do from the standpoint of the company as a whole?

	Continue to sell the circuit boards to outside customers.
	Sell the 1,000 additional circuit boards to Division B.