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The Cycle Division of Whispering Winds Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price $2,464 Variable cost
The Cycle Division of Whispering Winds Company has the following unit data related to its most recent cycle, the Roadbuster. Selling price $2,464 Variable cost of goods sold Body frame $336 Other variable costs 1,008 1,344 Contribution margin $1,120 Presently, the Cycle Division buys its body frames from an outside supplier. However Whispering Winds 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 $392 per frame. The variable cost for FrameBody is $296. The Cycle Division is willing to pay $304 to purchase the frames from FrameBody. (a) Your answer is correct. Assume that FrameBody has excess capacity and is able to meet all of the Cycle Division's needs. If the Cycle Division buys 1,120 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).) (1) Effect on the income of the Cycle Division $ 35,840 (2) Effect on the income of FrameBody $ 8.960 (3) Effect on the income of Whispering Winds $ 44.800 e Textbook and Media Solution Attempts: 3 of 3 used (b) Assume that FrameBody does not have excess capacity and therefore would lose sales if the frames were sold to the Cycle Division. If the Cycle Division buys 1,120 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).) (1) Effect on the income of the Cycle Division $ (2) Effect on the income of FrameBody $ (3) Effect on the income of Whispering Winds $
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