Hrubec Products, Inc., operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow

Selling price		$25
Expenses:
Variable	$16
Fixed (based on a capacity of 100,000 tons per year)	6	22
Net operating income		$3

Hrubec Products has just acquired a small company that manufactures paper cartons. This company will be treated as a division of Hrubec with full profit responsibility. The newly formed Carton Division is currently purchasing 29,000 tons of pulp per year from a supplier at a cost of $25 per ton, less a 10% purchase discount. Hrubec