Division A manufactures electronic circuit boards. The boards can be sold either to Division of the same company or to outside customers. Last year, the following activity occurred in Division A: $ $ 189 126 Selling price per circuit board Variable cost per circuit board Number of circuit boards Produced during the year Sold to outside customers Sold to Division B 21,800 15,800 6,000 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 $230 In additional variable cost per Instrument and then sold the instruments for $690 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 21,800 circuit boards. Next year, Division B wants to purchase 7,000 circuit boards from Division A rather than 6,000. (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? 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 21,800 circuit boards. Next year, Division B wants to purchase 7,000 circuit boards from Division A rather than 6,000. (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 Expenses Added by the division Transfer price paid Total expenses Net operating income 0 $ 0 0 $ 0 $ 0 0 Required Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume Division A's manufacturing capacity is 21,800 circuit boards. Next year, Division B wants to purchase 7,000 circuit boards from Division A rather than 6,000. (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 additional 1,000 circuit boards to Division B or continue to sell them to outside customers? Show less Continue to sell the additional 1,000 circuit boards to outside customers. Sell the 1,000 additional circuit boards to Division B.
