FOR EFFECTS THE OPTIONS ARE : DECREASE, NO EFFECT, INCREASE

Alpha International Corporation has two divisions, beta and gamma. Beta produces an electronic component that sells for $79 per unit, with the following costs based on its capacity of 210,600 units: Direct materials Direct labour Variable overhead Fixed overhead $28.00 16.00 6.00 12.00 Beta is operating at 70% of normal capacity and gama is purchasing 13,500 units of the same component from an outside supplier for $73 per unit. Calculate the benefit, if any, to beta in selling to gama 13,500 at the outside supplier's price. Benefit per unit Calculate the lowest price beta would be willing to accept. Lowest price