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Division X makes a part with the following characteristics: Production capacity: 25,000 units Selling price to outside customers. $18 Variable cost per unit. $11 Fixed
Division X makes a part with the following characteristics: Production capacity: 25,000 units Selling price to outside customers. $18 Variable cost per unit. $11 Fixed cost, total. $100,000 Division Y of the same company would like to purchase 10,000 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $17 each. 30. 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 $17 price internally and Division Y continues to buy from the outside supplier, the company as a whole will be: A. better off by $10,000 each period. B. worse off by $20,000 each period. C. worse off by $60,000 each period. D. worse off by $70,000 each period. alo
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