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Required Information [The following Information applies to the questions displayed below] In each of the cases below, assume Division X has a product that
Required Information [The following Information applies to the questions displayed below] In each of the cases below, assume Division X has a product that can be sold to outside customers or to Division Y of the same company. The managers of the divisions are evaluated based on their divisional profits. Division X: Capacity in units Case A B 97,000 94,000 Number of units being sold to outside customers Selling price per unit to outside customers 97,000 72,000 $ 56 $ 33 Variable costs per unit $ 25 $ 17 Fixed costs per unit (based on capacity) $ 6 $4 Division Y: Number of units needed for production 22,000 22,000 Purchase price per unit now being paid to an outside supplier $ 53 $ 34 Required: 1. Refer to the data In case A above. Assume in this case $1 per unit in variable selling costs can be avoided on Intracompany sales.
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