This question is also in an excel spreadsheet.
No Opportunity Costs The Van Division of MotoCar Corporation has offered to purchase 180,000 wheels from the Wheel Division for $41 per wheel. At a normal volume of 500,000 wheels per year, production costs per wheel for the Wheel Division are as follows: Direct materials $15 Direct labor 11 Variable overhead 6 Fixed overhead 17 Total $49 The Wheel Division has been selling 500,000 wheels per year to outside buyers at $58 each. Capacity is 700,000 wheels per year. The Van Division has been buying wheels from outside suppliers at $56 per wheel. (a) Calculate the net benefit (or cost) to the Wheel Division of accepting the offer from the Van Division. $Answer

per wheel (b) Calculate the net benefit (or cost) to Motocar Corp. if the Wheel Division accepts the offer from the Van Division. $Answer

per wheel
No Opportunity Costs The Van Division of MotoCar Corporation has offered to purchase 180,000 wheels from the Wheel Division for $41 per wheel. At a normal volume of 500,000 wheels per year, production costs per wheel for the Wheel Division are as follows: Direct materials $15 Direct labor 11 Variable overhead 6 Fixed overhead 17 Total $49 The Wheel Division has been selling 500,000 wheels per year to outside buyers at $58 each. Capacity is 700,000 wheels per year. The Van Division has been buying wheels from outside suppliers at $56 per wheel. (a) Calculate the net benefit (or cost) to the Wheel Division of accepting the offer from the Van Division. $Answer per wheel (b) Calculate the net benefit (or cost) to Motocar Corp. if the Wheel Division accepts the offer from the Van Division. $Answer per wheel

Question

This question is also in an excel spreadsheet.

No Opportunity Costs The Van Division of MotoCar Corporation has offered to purchase 180,000 wheels from the Wheel Division for $41 per wheel. At a normal volume of 500,000 wheels per year, production costs per wheel for the Wheel Division are as follows: Direct materials $15 Direct labor 11 Variable overhead 6 Fixed overhead 17 Total $49 The Wheel Division has been selling 500,000 wheels per year to outside buyers at $58 each. Capacity is 700,000 wheels per year. The Van Division has been buying wheels from outside suppliers at $56 per wheel. (a) Calculate the net benefit (or cost) to the Wheel Division of accepting the offer from the Van Division. $Answer

per wheel (b) Calculate the net benefit (or cost) to Motocar Corp. if the Wheel Division accepts the offer from the Van Division. $Answer

per wheel

No Opportunity Costs The Van Division of MotoCar Corporation has offered to purchase 180,000 wheels from the Wheel Division for $41 per wheel. At a normal volume of 500,000 wheels per year, production costs per wheel for the Wheel Division are as follows: Direct materials $15 Direct labor 11 Variable overhead 6 Fixed overhead 17 Total $49 The Wheel Division has been selling 500,000 wheels per year to outside buyers at $58 each. Capacity is 700,000 wheels per year. The Van Division has been buying wheels from outside suppliers at $56 per wheel. (a) Calculate the net benefit (or cost) to the Wheel Division of accepting the offer from the Van Division. $Answer per wheel (b) Calculate the net benefit (or cost) to Motocar Corp. if the Wheel Division accepts the offer from the Van Division. $Answer per wheel

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This question is also in an excel spreadsheet. No Opportunity Costs The Van Division of MotoCar Corporation has offered to purchase 180,000 wheels from the

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