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need exact formate . Aobert Prodvcts incorporated consists of three decectralzed divisians: Bayside Division, Cole Division, and Oiamond Division. The president of Robert Products has
need exact formate .
Aobert Prodvcts incorporated consists of three decectralzed divisians: Bayside Division, Cole Division, and Oiamond Division. The president of Robert Products has given the maragers of the three dvibions authorlay to decide whether to sell outside the compary or among themselves at an internal price determined by the divisot managers Market conditons are such that sales made intemaly or externally wai not aflect mbrket or yansfer prices lnhermediase marnets wat always be avaliable for Rayside, Coie, and Diamond to purchase their man dachuring needs or soli their product The mansger of the Cole Drision is cusently considering the two a teinatve onders presented below - The Diamond Division is in reed of 3,000 unts of a motor that can be supplied by the Colp Oivion. To manufbcture these motors. Cole would purchase components fiom the Baynide Diaision at a pice of $600 per unt, Baysides variable cout tor these components is $300 per unit Cole Division wit further process these corponents at a variabie cost of $500 per unit. If the biamand Division cannot corain the motors fiom Cole Dyision, I wil purchase the mosors tiom London Compeny atich has offered to supply them of Damond at a price of 51500 per unt. London Compony wovld also cost lat thele componects is $209 per unit - The Wales Company warts to place an erder with the Cole Divion for 2500 smiar malors at a frice of $1250 per the Cole would again purchase components from the Bayside Givsion at a once of 5500 per unc, Bagsdels weriabie cost for these components is $250 per unt. Cole Dwision wit futther arocess these components at a variabie cost of $400 per unit The Cole Divions plant cepocity is imited. and the divivon can acceot eiter the Wivi contract or the Damand ordee. but not both. The president of Rober Prodocts and the marager of the Cole Dinian egree that it would not be berehicial in the short of long run to increase capocty Pequired: Cequired Dermine whether the Cole Divion should seil motors to the Danond Division ot the prevaitng motket prict. or accept the Wales Company contract (Enter your anwwers in thousands)Step by Step Solution
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