QUESTION 1. Parkside Inc. has three divisions (Entertainment, Plastics, and Video Card), each of which is considered an investment center for performance-evaluation purposes. The Entertainment Division manufactures video arcade equipment using products produced by the other two divisions, as follows:

• The Entertainment Division purchases plastic components from the Plastics Division that are considered unique (i.e., they are made exclusively for the Entertainment Division). In addition, the Plastics Division makes less-complex plastic components that it sells externally and earns $3 contribution margin per unit.
• The Entertainment Division purchases, for each unit it produces, a video card from Parkside's Video Card Division, which also sells this video card externally (to other producers) for $20 per unit. This video card is also available from external suppliers for $20 per unit.
• The per-unit manufacturing costs associated with each of the above two items, as incurred by the Plastic Components Division and the Video Card Division, respectively, are:

Plastic Components Direct material $1 .25 Direct labour 2.35 Variable overhead 1.00 Fixed overhead M Total cost per unit $5.00 Video Cards $2.40 3.00 1.50 E $9.15 Division X Division Y Sales $ 10,500,000 $ 458,000 Cost of goods sold 6,000,000 316,000 Operating expenses 3,200,000 58,000 Invested capital at the beginning of the year 3,000,000 1,200,000 Invested capital at the end of the year 5,000,000 2,000,000Expansion project Sales $ 2,000,000 Cost of goods sold 1,200,000 Operating expenses 640,000 Invested capital 1,000,000