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Toyota Accessories Division [a division within Toyota] produces roof racks for Toyota's RAWL range. The division operates as a prot centre within the parent company.

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Toyota Accessories Division [a division within Toyota] produces roof racks for Toyota's RAWL range. The division operates as a prot centre within the parent company. It also sells its roof racks to other SU'IuIr manufacturers [external customers}. The current selling price for Toyota's roof racks is $375. The head of Toyota's Sales Division's performance is measured based on meeting tight profit targets. With the current competitive environment she is looking for ways to cut costs and increase her profit and in turn her bonus. She finds another {external} roof rack manufacturer who will sell ED DOD roof racks for 5250 as a result of a quantity discount. Toyota Accessories Division has adequate capacity to supply the needs of Toyota. The following data are for Toyota Accessories Division: 1|iiariable overhead $212} per unit Fixed overhead {based on a capacity of ED DUE! units]

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