XYZ corporation has a company with two divisions. Division A manufactures a product that has a variable cost of $6, and sells the product to the market at $12 a unit. The division has a capacity to produce 30,000 units and its fixed costs are $60,000. Current production is 20,000 units.

a) Division B wants to buy from division A 5000 units at $7 per unit. Currentlh division B pays $10/unit to purchase these units from the market. What would you advise the company and division A to do and why? Support your answer with calculations.

b)If an outside company wanted to purchase the 5000 units for $7 what would you advise company and divison A to do? Support your answer with calculations.