Question 4 - 12 marks Parts Division - Has capacity to produce 2,000 motors per year - Currently selling 1,500 motors per year to the Assembly division - Currently selling 300 motors per year to outside customers for $16 each. This seems to be the total market for outside sales - Variable cost for each motor is $12 each Assembly Division - Sells the completed fan for $25 each and earns a 16% margin on each fan - Produces the finished fan with the motors purchased from the Parts division for an additional variable $6 each - Currently all motors are purchased from the Parts division division. Required 1. What is the price that the Assembly department is paying for each motor purchased from the Parts divion? 2. Do you agree that the manager is losing money on every motor sold to the Assembly division? Explain. Question 4 - 12 marks Parts Division - Has capacity to produce 2,000 motors per year - Currently selling 1,500 motors per year to the Assembly division - Currently selling 300 motors per year to outside customers for $16 each. This seems to be the total market for outside sales - Variable cost for each motor is $12 each Assembly Division - Sells the completed fan for $25 each and earns a 16% margin on each fan - Produces the finished fan with the motors purchased from the Parts division for an additional variable $6 each - Currently all motors are purchased from the Parts division division. Required 1. What is the price that the Assembly department is paying for each motor purchased from the Parts divion? 2. Do you agree that the manager is losing money on every motor sold to the Assembly division? Explain