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Trubail Inc., which manufactures sports equipment, consists of several operating divisions. Division A has decided to go outside the company to buy materials since division
Trubail Inc., which manufactures sports equipment, consists of several operating divisions. Division A has decided to go outside the company to buy materials since division B plans to increase its selling price for the same materials to $200. Information for division A and division B follows: Outside price for materials $190 Division A's annual purchases 14,000 units Division B's variable costs per unit $180 Division B's fixed costs, per 51.330,000 year Division B's capacity utilization 100% Required: 1. Assume that division B cannot sell its materials to outside buyers. Calculate the net cost or benefit to the company as a whole if Division A purchases the materials outside the company. 2-a. Assume that division B can save $250,000 in fixed costs if it does not manufacture the material for Division A Calculate the net cost or benefit to the company as a whole for A to purchase outside the company 2-b. From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market? 3-a. Assume the situation in Requirement 1. If the outside market value for the materials drops $24, calculate the net cost or benefit to the company as a whole for A to purchase outside the company 3-b. From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market? Complete this question by entering your answers in the tabs below. Req1 Req 2A Req 2B Req 3A Req 3B Assume that division B cannot sell its materials to outside buyers. Calculate the net cost or benefit to the company as a whole if Division A purchases the materials outside the company. (Enter all the amounts as positive value.) Show less Reg1 Reg 2A >
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