Van Division of Travel Vans Corporation Offered to purchase 180,000 wheels for $76 per wheel. Normal volume for Wheels Division is 500,000 wheels per year:

Direct materials $25

Direct labor $20

Variable overhead$12

Fixed overhead$30

Total $88

Wheels Division has been selling 500,000 to outside buyers at $106 each. Capacity is 700,000 per year. Van division has been buying wheels from outside suppliers at $100 per wheel.

Should the Wheels Division accept the offer? Calculate the net benefit (or cost) to the Wheel Division of accepting the officer from the Van Division.

How much per wheel?

From the standpoint of the company, will the internal sale be beneficial? Calculate the net benefit (or cost) to Travel Vans Corps. if the Wheel Division accepts the officer the Van Division. How much per wheel?