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Frocks and Gowns, Inc., has two divisions, Day Wear and Night Wear. The Day Wear Division has an investment base of $840,000 and produces (and

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Frocks and Gowns, Inc., has two divisions, Day Wear and Night Wear. The Day Wear Division has an investment base of $840,000 and produces (and sells) 115,000 units of Collars at a market price of $10.20 per unit. Variable costs total $4.50 per unit, and fixed charges are $3.40 per unit (based on a capacity of 135,000 units). The Night Wear Division wants to purchase 30,000 units of Collars from The Day Wear Division. However, the Night Wear Division is only willing to pay $6.20 per unit. What is the contribution margin for the Day Wear Division without the transfer to the Night Wear Division? $655,500 $264,500 $713,000 $1,104,500

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