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Division X makes a part with the following characteristics: Production capacity Selling price to outside customers Variable cost per unit Fixed cost, total 29,000
Division X makes a part with the following characteristics: Production capacity Selling price to outside customers Variable cost per unit Fixed cost, total 29,000 units $ 26 $ 19 $104,000 Division Y of the same company would like to purchase 10,040 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $25 each. Suppose Division X has ample excess capacity to handle all of Division Y's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division X refuses to accept the $25 price internally and Division Y continues to buy from the outside supplier, the company as a whole will be:
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