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Division P of Launch Corporation has the capacity for making 75,500 wheel sets per year and regularly sells 60,500 each year on the outside market.

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Division P of Launch Corporation has the capacity for making 75,500 wheel sets per year and regularly sells 60,500 each year on the outside market. The regular sales price is $105 per wheel set, and the variable production cost per unit is $69. Division Q of Launch Corporation currently buys 30,500 wheel sets (of the kind made by Division P) yearly from an outside supplier at a price of $95 per wheel set. If Division Q were to buy the 30,500 wheel sets it needs annually from Division P at $91 per wheel set, the change in annual net operating income for the company as a whole, compared to what it is currently, would be: Multiple Choice $605,000 $235.000 O O O $793,000

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