What the company as a whole will be

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Reference no: EM132612870

Division X makes a part with the following characteristics:

Production capacity 27,000 units

Selling price to outside customers $22

Variable cost per unit $15

Fixed cost, total $102,000

Question 1: Division Y of the same company would like to purchase 10,020 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $21 each. Suppose Division X has ample excess capacity to handle all of Division Y's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division X refuses to accept the $21 price internally and Division Y continues to buy from the outside supplier, the company as a whole will be

Reference no: EM132612870

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