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Internal or External Acquisitions: No Opportunity Costs The Van Division of Travel Vans Corporation has offered to purchase 48,000 wheels from the Wheel Division for
Internal or External Acquisitions: No Opportunity Costs The Van Division of Travel Vans Corporation has offered to purchase 48,000 wheels from the Wheel Division for $80 per wheel. At a normal volume of 320,000 wheels per year, production costs per wheel for the Wheel Division are as follows: The Wheel Division has been selling 320,000 wheels per year to outside buyers at $100 each. Capacity is 400,000 wheels per year. The Van Division has been buying wheels from outside suppliers at $95 per wheel. Required a. Should the Wheel Division manager accept the offer? Show computations. b. From the standpoint of the company, will the internal sale be beneficial
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