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Phillips Van Heusen Wholesale Division manufactures sport shirts and dress shirts. The table below shows data for the sport shirt product line. Production capacity
Phillips Van Heusen Wholesale Division manufactures sport shirts and dress shirts. The table below shows data for the sport shirt product line. Production capacity in units 30,200 units Selling price to outside customers $ 22.00 Variable cost per unit Total fixed costs $ 17.00 $102,900 Philips Van Heusen also operates a chain of retail outlet stores which is run out of their Retail Division. The Retail Division would like to purchase 17,300 units of sport shirts from the Wholesale Division. The Retail Division is currently purchasing these sport shirts from an outside supplier at a price of $20 each. Assume that the Wholesale Division is operating at capacity and can sell all sport shirts manufactured to outside customers at the price showin in the table above. If the Wholesale Division agrees to sell the sport shirts to the Retail Division at $20 per unit, the company as a whole will be:
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