Problem 1 20 points The Nicholson and Cage Divisions are in the same company. Currently the from the Nicholson Division for $82 per unit. The Nicholson Division part to $94 per unit. Cage Division can buy the part for $88 from an the part obtained from the Nicholson Division is below the Cage wants to i increase the pt data for price of the the supplier. T Direct materials Direct labor Variable indirect production Fixed indirect production S25.50 32.50 22.50 9.60 Total cost $90.10 If Nicholson does not provide the parts to Cage, it will save one-fourth of the fixed indirect pro costs. The Nicholson Division has excess capacity but no altermative uses of the facilities. Required: From the standpoint of the company as a whole, should Cage Division continue to buy the part from Nicholson Division? Hint: Determine the avoidable unit cost to make the part in house