What is the incremental benefit to sebastian enterprises

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Reference no: EM132792344

Division A of Sebastian Enterprises manufactures a product called XYZ. Current data for Division A are as follows:

Capacity          59667

Current production & sales  51503

Per unit data

Selling price  $90.99

Variable costs - production 34.34

Variable costs - marketing relating to external sales 15.13

Fixed costs (total) $760338

Problem 1: Division B of Sebastian Enterprises currently buys 21077 units of XYZ yearly from an outside supplier at a price of $55.56. Division B would like to buy the 21077 units of XYZ it needs annually from Division A. What is the incremental benefit (cost) to Sebastian Enterprises if an internal transfer takes place?

Select one:

a. $-407789
b. $-849232
c. $447254
d. $-88894

Reference no: EM132792344

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