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Given the following data for Division L: Selling price to outside customers $ 110 Variable cost per unit 60 Fixed cost per unit (based on
Given the following data for Division L:
Selling price to outside customers | $ | 110 |
Variable cost per unit | 60 | |
Fixed cost per unit (based on capacity) | 20 | |
Capacity (in units) | 30,000 |
Division N would like to purchase 11,000 units from Division L at a price of $85 per unit. Division L has no excess capacity to handle Division N's requirements. Division N currently purchases from an outside supplier at a price of $100. If Division L accepts a $85 price internally, the company, as a whole, will be better or worse off by: |
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