Geneva Corporation has a Castings Division that does casting work of various types. The company's Machine Products Division has asked the Casting Division to provides with 10.000 special contings each year on a continuing basis. The special contings would require $20 per unit in variable production costs. The Machine Products Division has a bid from an outside supplier of $30 per unit for the castings In order to have time and space to produce the new casting, the Castings Division would have to cut back producten of another casting the NW2 which it presently is producing. The wels for $40 per unit, and requires $25 per urit in variable production costs Boxing and shipping costs of the NW2 e 5 per unit. Boring and shipping costs for the new special casting would be only $2 per unit. The company is now producing and selling 100,000 units of the w2 each year. Production and sales of this casting would drop by 10% if the new casting were produced 9 Required: What is the range of transfer prionsary, within which both the division profits would increase as a result of agreeing to the transfer of 10.000 coins per year from the Castings Division to the Machine Products Division? thi to it in the best interest of Geneva Corporation for this transfer to take place? How much could the company gainyles from this transfer 11 12 Geneva Corporation has a Castings Division that does casting work of various types. The company's Machine Products Division has asked the Casting Division to provides with 10.000 special contings each year on a continuing basis. The special contings would require $20 per unit in variable production costs. The Machine Products Division has a bid from an outside supplier of $30 per unit for the castings In order to have time and space to produce the new casting, the Castings Division would have to cut back producten of another casting the NW2 which it presently is producing. The wels for $40 per unit, and requires $25 per urit in variable production costs Boxing and shipping costs of the NW2 e 5 per unit. Boring and shipping costs for the new special casting would be only $2 per unit. The company is now producing and selling 100,000 units of the w2 each year. Production and sales of this casting would drop by 10% if the new casting were produced 9 Required: What is the range of transfer prionsary, within which both the division profits would increase as a result of agreeing to the transfer of 10.000 coins per year from the Castings Division to the Machine Products Division? thi to it in the best interest of Geneva Corporation for this transfer to take place? How much could the company gainyles from this transfer 11 12
