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Fragrance Pty Ltd has two divisions: the Perfume Division and the Bottle Division. The company is decentralised and each division is evaluated as a profit
Fragrance Pty Ltd has two divisions: the Perfume Division and the Bottle Division. The company is decentralised and each division is evaluated as a profit centre. The Bottle Division produces bottles that can be used by the Perfume Division which produces perfume. The following information relates to the production of bottles. Bottle Division Production capacity 50,000 Internal demand from Perfume Division 46,000 External demand 5,000 Market price ($) 3 Variable costs per unit ($): |-Processing cost 2.5 - Shipping cost 0.1 Fixed cost per month ($) 25,000 Fragrance Pty Ltd has two divisions: the Perfume Division and the Bottle Division. The company is decentralised and each division is evaluated as a profit centre. The Bottle Division produces bottles that can be used by the Perfume Division which produces perfume. The following information relates to the production of bottles. Bottle Division Production capacity 50,000 Internal demand from Perfume Division 46,000 External demand 5,000 Market price ($) 3 Variable costs per unit ($): |-Processing cost 2.5 - Shipping cost 0.1 Fixed cost per month ($) 25,000
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