The Allison Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit centre. Each division manager has been delegated full authority on all decisions involving the sale of that division's output both to outsiders and to other divisions of Allison. (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 Division C purchase 1,200 units from an external supplier assuming that there are no alternative uses for internal facilities of Division A. (Click the icon to view the results of the analysis.) Now, assume that Division A can sell the 1,200 units to other customers at $169 per unit, with variable marketing cost of $9 per unit. Required Determine whether Allison will benefit if Division C purchases the 1,200 units from external suppliers at $145 per unit. Show your computations. 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.) Less: - X Division information Contribution margin from selling units to other customers Net costs to the company as a result of purchasing from external suppliers Division C has in the past always purchased its requirement of a particular tractor-engine component from Division A. However, when informed that Net benefit (cost) to the company as a whole Division A is increasing its selling price to $160, Division C's manager decides to purchase the engine component from external suppliers. The company as a whole benefit in this situation if Division C purchased from external suppliers. Division C can purchase the component for $145 per unit in the open market. Division A insists that because of the recent installation of some highly specialized equipment and the resulting high depreciation charges, it will not be able to earn an adequate return on its investment unless it raises its price. - X Division A's manager appeals to top management of Allison for support in the Results of analysis dispute with Division C and supplies the following operating data: C's annual purchase of the tractor-engine component 1,200 units A's variable cost per unit of the tractor-engine component $135 $20 Purchase costs paid to external suppliers $ 174,000 A's fixed cost per unit of the tractor-engine component Less: Savings in variable costs 162,000 $ 12,000 Net cost to the company as a result of purchasing from external suppliers Print Done Print Done