Question
Given the following data for Investment Center S: Selling price to outside customers Variable cost per unit $120 Fixed cost per unit (based on capacity)
Given the following data for Investment Center S: Selling price to outside customers Variable cost per unit $120 Fixed cost per unit (based on capacity) Capacity (in units) 32. 100,000 $190 50 Investment Center B would like to purchase 1,000 units from Investment Center S at a price of $175 per unit Investment Center B currently purchases the 1,000 units from an outside supplier at a price of $180. Investment Center S has sufficient idle capacity to handle Investment Center B's requirements. If Investment Center S accepts a $175 price internally, the company, as a whole, will be better or worse off by A) $60,000 B) $80,000 33. C) $40,000 D) $10,000 Investment Center S has no idle capacity to handle Investment Center B's requirements. If Investment Center S accepts a $175 price internally, the company, as a whole, will be better or worse off by A) $60,000 B) $80,000 C) $40,000 D) $10,000
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