Given the following data for Division L:

Selling price to outside customers	$150
Variable cost per unit	$80
Fixed cost per unit (based on capacity)	30
Capacity (in units)	50,000

40. This is an IDLE/EXCESS CAPACITY question. Division N would like to purchase 10,000 units from Division L at a negotiated transfer price of $125 per unit. Division L has idle/excess capacity to handle Division N's requirements. Division N currently purchases from an outside supplier at a price of $140. If Division L accepts a $125 negotiated transfer price, the company, as a whole, (Make/Buy schedule) will be better or worse off by

A) $600,000

B) $100,000

C) $115,000

D) $250,000

41. This is a FULL CAPACITY question. Division N would like to purchase 10,000 units from Division L at a negotiated transfer price of $125 per unit. Division L is at full capacity and therefore does not have the capacity to handle Division N's requirements. Division N currently purchases from an outside supplier at a price of $140. If Division L accepts a $125 negotiated transfer price, the company, as a whole, (Make/Buy schedule) will be better or worse off by

A) $600,000

B) $100,000

C) $115,000

D) $250,000