Business

Amanda

14 August, 07:01

Division A makes a part with the following characteristics: Production capacity in units 32,900 units Selling price to outside customers $ 22 Variable cost per unit $ 18 Total fixed costs $ 103,400 Division B, another division of the same company, would like to purchase 15,200 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $20 each. Suppose that Division A has ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division A refuses to accept the $20 price internally and Division B continues to buy from the outside supplier, the company as a whole will be: