The company already completed an analysis to determine if it was in its best interest to have division C purchase

1800 units from an external supplier for $115 per unit, assuming that there are no alternative uses for internal facilities of division A.

(Click to view the results of the analysis.)

Now, assume that division A can sell the 1800 units to other customers at $ 139 per unit, with variable marketing cost of $ 4 per unit.

MOREINFO ON DIVISIONS:

Division C has in the past always purchased its requirement of a particulartractor-engine component from division A. However, when informed that division A is increasing its selling price to

$135

division C's manager decides to purchase the engine component from external suppliers.

Division C can purchase the component for

$115

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. Division A's manager appeals to top management of

Josh minus LesterJoshLester

for support in the dispute with division C and supplies the following operating data:

C's annual purchases of the tractor-engine component	1 800
A's variable cost per unit of the tractor-engine component	$100
A's fixed cost per unit of the tractor-engine component	$20

Determine whether

Josh minus LesterJoshLester

will benefit if division C purchases the

1,800 units from external suppliers at 115 per unit. Show your computations.

Can you please solve all requirements please

LE-LJ (shhilar to The Josh-Lester Corporation, manufacturer of tractors and other heavy farm equipment, is The company already completed an analysis to determi organized along decentralized product lines, with each manufacturing division operating as a division C purchase 1,800 units from an external supplie separate profit center. Each division manager has been delegated full authority on all decisions there are no alternative uses for internal facilities of divis involving the sale of that division's output both to outsiders and to other divisions of (Click to view the results of the analysis.) Josh- Lester (Click to view the information on n- i Data Table Begin by calculating the contribution minus sign.) Purchase costs paid to extemal suppliers Less: Savings in variable costs Net cost to the company as a result of purchasing from external suppliers $ 207,000 180,000 $ 27,000 Less Print Done Contribution margin from selling units Choose from any list or enter any number in the input fields and then click Check Answer. Clear All MacBook Pro G Search or type URL