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$186Variable cost per circuit board$120Number of circuit boards: Produced during the year21,000Sold to outside customers14,400Sold to Division B6,600

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 $220 in additional variable cost per instrument and then sold the instruments for $660 each.

Required:

1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole.

2. Assume Division A's manufacturing capacity is 21,000 circuit boards. Next year, Division B wants to purchase 7,600 circuit boards from Division A rather than 6,600. (Circuit boards of this typeee are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit

electronic instrument manufactured by that division (one board per instrument). Division B incurred $220 in additional variable cost per instrument and then sold the instruments for $660 each. Required: 1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 21,000 circuit boards. Next year, Division B wants to purchase 7,600 circuit boards from Division A rather than 6,600. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. Division A Division B Total Company Sales $ 3,906,000 $ 4,356,000 Expenses: Added by the division Transfer price paid Total expenses Net operating income $ 3,906,000 $ 4,356,000