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The Cycle Division of Ayala Company has the following unit data related to its most recent cycle, the Roadbuster. Presently, the Cycle Division buys its
The Cycle Division of Ayala Company has the following unit data related to its most recent cycle, the Roadbuster. Presently, the Cycle Division buys its body frames from an outside supplier. However Ayala has another division, FrameBody, that makes body frames for other cycle companies. The Cycle Division believes that FrameBody's product is suitable for its new Roadbuster cycle. Presently, FrameBody sells its frames for $350 per frame. The variable cost for FrameBody is $270. The Cycle Division is willing to pay $280 to purchase the frames from FrameBody. (a) Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,000 frames from FrameBody, determine the following: (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
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