Truball 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 Division A's annual purchases Division B's variable costs per unit Division B's fixed costs, per year Division B's capacity utilization $125 7,500 units $115 $1,200,000 1884 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 $180,000 ip 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 $15, 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. 2-0. A WIG LIVISION D CON DOVE PIOV, UUU ULUSL II UVES HUL OHUIOLLUIE UIE HOLEHLIUI DIVISIO 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 $15, 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. Reg 1 Reg 2A Req 28 Reg 3A Reg 38 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.) Reg 2A > 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 $15, 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. Req 1 Reg 2A Reg 20 Req Reg 38 Assume that division B can save $180,000 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. (Enter all the amounts as positive value.) (Reg 1 Reg 28 > 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? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 2B Req Reg 38 Assume the situation in Requirement 1. If the outside market value for the materials drops $15, calculate the net cost or benefit to the company as a whole for A to purchase outside the company. (Enter all the amounts as positive value)
