Division A of Sebastian Enterprises manufactures a product called XYZ. Current data for Division A are as follows:

Capacity

59667

Current production & sales

51503

Per unit data

Selling price

$90.99

Variable costs - production

34.34

Variable costs - marketing relating to external sales

15.13

Fixed costs (total)

$760338

Division B of Sebastian Enterprises currently buys 21077 units of XYZ yearly from an outside supplier at a price of $55.56. Division B would like to buy the 21077 units of XYZ it needs annually from Division A.

What is the incremental benefit (cost) to Sebastian Enterprises if an internal transfer takes place?

Select one:

a.$-407789

b.$-849232

c.$447254

d.$-88894