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The Jill - Farley Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating
The Jill - Farley Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit center. 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 Jill - Farley. (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 1,800 units from an external supplier for $120 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 1,800 units to other customers at $153 per unit, with variable marketing costs of $8 per unit. Read the requirement. 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: Contribution margin from selling units to other customers Requirement Determine whether Jill - Farley will benefit if division C purchases the 1,800 units from external suppliers at $120 per unit. Show your computations. -
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