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Division T of Company makes a timer which it sells for $36 to outside customers. The division has supplied the following data concerning the times:
Division T of Company makes a timer which it sells for $36 to outside customers. The division has supplied the following data concerning the times: Division S of Clocker Company is currently buying 5, 500 similar timers each month from an overseas supplier at $32.0 each. Division S would like to acquire its timers from Division T if the price is right. Suppose Division T is operating at capacity and can sell all of the timers it produces to outside customers at its usual selling price. If Division T meets the price of the overseas supplier and sells 5, 500 timers to Division S each month, the effect on the monthly net operating income of the company as a whole will be: decrease of $22,000 increase of $17,000 increase of $13,000 decrease of $77,000
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