Help Save & Exit Sub Check my work Phoenix Inc, a cellular communication company, has multiple business units, organized as divisions. Each division's management is compensated based on the division's operating income. Division A currently purchases cellular equipment from outside markets and uses it to produce communication systems. Division B produces similar cellular equipment that it sells to outside customers-but not to division A at this time. Division A's manager approaches division B's manager with a proposal to buy the equipment from division B. If it produces the cellular equipment that division A desires, division B will incur variable manufacturing costs of s60 per unit Relevant Information about Division B Book Sells 92,500 units of equipment to outside customers at $130 per unit Operating capacity is currently 80%, the division can operateht 100% Variable manufacturing costs are $70 per unit Variable marketing costs are $8 per unit Fixed manufacturing costs are $920,000 rences Income per Unit for Division A (assuming parts purchased extenally, not internalily from division B) Sales revenue s 320 Hanufacturing costs Cellular equipment Other materials Fixed costs Total manufacturing costs Gross margin Harketing costs: 10 40 130 190 hapter 19 Assignment Saved Save & Exit Help Check Gross margin Marketing costs: Variable Fixed Total marketing costs 190 35 15 5e Operating income per unit $ 140 .3 oints Required: 1. Division A wants to buy 42.000 units from division B at $75 per unit. Determine the contribution margin for each type sale by division B. Should division B accept or reject the proposal? How would your answer differ if (a) division A requires all 42,000 units in the order elook eerencersto be shipped by the same supplier and what would be the nift operating loss or gain to division B and the firm as a whole, or (b) division A would accept partial shipment from division B and what would be the benefit from this alternative to division B? 2. What is the range of transfer prices over which the divisional managers might negotiate a final transfer price? Complete this question by entering your answers in the tabs below Reg 18 Req 1c Req 2 Req 1A Division A wants to buy 42,000 units from division B at s75 per unit. Determine the contribution margin for each type sale by division B. Should division B accept or reject the proposal? To Division A Outside Prou 11 nf 11 ter 19 Assignment Saved Help Save & E Chee mplete this question by entering your answers in the tabs below Req 18 Req 1A Req 1C Req 2 tS Division A wants to buy 42,000 units from division B at $75 per unit. Determine the contribution margin for each type sale by division B. Should division B accept or reject the proposal? eBook To Division A Outside Selling Price eferences Contribution Margin Should division B accept or reject the proposal? Req 1B ) Prey 11 of 11 Next hapter 19 Assignment Saved Help Save plete this question by entering your answers in the tabs below. Reg 1A Reg 1BReq 1C Req 2 0 3 points How would your answer differ if division A would accept partial shipment from division B and what would be the benefit from this alternative to division B eBook otal capacity of division B Maximum sales possible to outside consumers Remaining Capacity Contribution per unit Total Contribution or beneft from this alternative References C Req 1B Req 2 ) Prey 11 of 11 Nex