TICO Company makes rowing machines. The manufacturing division makes parts and supplies them to the assembly division where the machines are assembled. Each division manager is compensated based on division operating income. The assembly division currently acquires all its parts from the manufacturing division at $400 per machine set. The assembly division manager could purchase similar set of parts for one whole machine in the market for $420/set.

The manufacturing division is currently operating at 75% of its capacity of 4,000 sets (units) and has the following particulars:

Direct materials (S150 per unit X 3,000 units)	$450,000
Direct manufacturing labour ($50 per unit x 3,000 units)	$150,000
Variable manufacturing overhead costs ($40 per unit x 3,000 units)	$120,000
Fixed manufacturing overhead costs	$630,000

All the manufacturing division's 3,000 units are currently transferred to the assembly division. No set of parts are sold in the outside market. The manufacturing division has just received an order for 2,000 units at $250 per machine set that would utilize half the capacity of the plant. The order must be either taken in full or rejected totally. The order is for a slightly different machine than what the machine manufacturing division currently makes but takes the same amount of manufacturing time. To produce the new machine set, manufacturing division would require direct materials per unit of $100, direct manufacturing labor per unit of $50, and variable manufacturing overhead costs per unit of $30.

Required (Show all calculations) a) From the viewpoint of the Manufacturing Division should it accept the outside offer order for the 2,000 units?

b) From the viewpoint of TICO Company as a whole, should the manufacturing division accept the order for the 2,000 units?

c) In case of goal incongruity what would you suggest? At what price from the outside supplier will the manufacturing department be willing to accept the external order?