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Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $ 2 9 6 per unit.
Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $ per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $ per unit.
Assume that a transfer price of $ has been established and that units of materials are transferred, with no reduction in the Components Divisions current sales.
a How much would Ziegler Inc.s total operating income increase?
fill in the blank of $
b How much would the Instrument Division's operating income increase?
fill in the blank of $
c How much would the Components Division's operating income increase?
fill in the blank of $
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