Frocks and Gowns, Inc., has two divisions, Day Wear and Night Wear. The Day Wear Division has an investment base of $720,000 and produces (and sells) 103,000 units of Collars at a market price of $11.50 per unit. Variable costs for the Collars total $3.80 per unit, and fixed charges are $4.30 per unit (based on a capacity of 123,000 units). The Night Wear Division wants to purchase 22,000 units of Collars from The Day Wear Division. However, the Night Wear Division is only willing to pay $8.10 per unit. What is the contribution margin for the Day Wear Division if it transfers 22,000 units to the Night Wear Division at $8.10 per unit?

Multiple Choice

• $793,100.

• $350,200.

• $872,300.

• $834,300.