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Given the following data for Division S: This is an IDLE/EXCESS CAPACITY question. Division B would like to purchase 20,000 units from Division S at
Given the following data for Division S: This is an IDLE/EXCESS CAPACITY question. Division B would like to purchase 20,000 units from Division S at a negotiated transfer price of $145 per unit. Division S has idle/excess capacity to handle Division B's requirements. Division B currently purchases from an outside supplier at a price of $165. If Division S accepts a $145 negotiated transfer price, the company, as a whole, (Make/Buy schedule) will be A) $1,600,000 B) $1,300,000 C) $(1,600,000) D) $(1,300,000) This is a FULL CAPACITY question. Division B would like to purchase 20,000 units from Division S at a negotiated transfer price of $145 per unit. Division S is at full capacity and therefore does not have the capacity to handle Division B's requirements. Division B currently purchases from an outside supplier at a price of $165. If Division S accepts a \$145 negotiated transfer price, the company, as a whole, (Make/Buy schedule) will be A) $(300,000) B) $300,000 C) $(160,000) D) $160,000
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