Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Given the following data for Division X: Selling price to outside customers $ 28 Variable cost per unit 14.25 Fixed cost - Total 50,000 Capacity
Given the following data for Division X:
Selling price to outside customers | $ | 28 |
Variable cost per unit | 14.25 | |
Fixed cost - Total | 50,000 | |
Capacity (in units) | 45,000 |
Division Y would like to purchase 16,500 units each period from Division X. Division X has ample excess capacity to handle all of Division Y's needs. Division Y now purchases from an outside supplier at a price of $21.5. If Division X refuses to accept an $19.5 price internally, the company, as a whole, will be worse off by: |
$86,625. | |
$119,625. | |
$107,250. | |
$226,875. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started