Principal Engineer, SA, a Swiss transportation equipment manufacturer, is heavily decentralized. Each division head has full authority on all decisions regarding sales to internal or external customers. (Click the icon to view the information on the divisions.) The company already completed an analysis to determine if it was in its best interest to have Uri purchase 2,000 units from an outside supplier assuming that there are no alternative uses for internal facilities of the Solothurn division. (Click to view the results of the analysis.) Read the requirement. Requirement 1. Suppose the Solothurn division could modify the component at an additional variable cost of CHF 20 per unit and sell the 2,000 units to other customers for CHF 290. Then, would the entire company benefit if the Uri division purchased the 2,000 components from outsiders at CHF 260 per unit? Begin by calculating the contribution margin from selling units to other customers. Then calculate the net benefit (cost) to the company as a whole. (Enter a net cost using parentheses or a minus sign.) Sales to other customers Less: Variable costs 580,000 540,000 Data table 40,000 Contribution margin from selling units to other customers Net costs to the company as a result of purchasing from outside suppliers Net benefit (cost) to the company as a whole S Get Data table Purchase costs paid to outside suppliers Less: Savings in variable costs 520,000 500,000 20,000 Net cost (benefit) to company as a whole Print Done The Uri division has always acquired a certain equipment component from the Solothum division. The Solothurn division recently acquired specialized equipment that is used primarily to make this component. The Geneva division has informed the Lucerne division that their fixed costs have increased by CHF 25 per unit because of the depreciation charges on the new equipment, so the unit price will be increased to CHF 285. However, the Uri division's management has now decided to purchase the component from outside suppliers at a price of CHF 260. The Solothurn division has supplied the following production cost data for this component: Annual production of component (all for sale to Uri division) Solothurn's variable costs per unit Solothurn's fixed costs per unit 2,000 units CHF CHF 250 15 Print Done Clear all answer