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Truball Incorporated which manufactures sports equipment, consists of several operating divisions. Division A has decided to go outside the company to buy materials because division
Truball Incorporated which manufactures sports equipment, consists of several operating divisions. Division A has decided to go outside the company to buy materials because division B plans to increase its selling price for the same materials to $200. Information for division A and division B follows: 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 $155,000 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 $21, 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. 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.) Complete this question by entering your answers in the tabs below. Assume that division B can save $155,000 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.) Complete this question by entering your answers in the tabs below. 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. Assume the situation in Requirement 1. If the outside market value for the materials drops $21, 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.) Complete this question by entering your answers in the tabs below. From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market
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