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What would be the change in annual operating income

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Reference no: EM133152228

Question - Division P of Turbo Corporation has the capacity for making 75,000 wheel sets per year and regularly sells 60,000 each year on the outside market. The regular sales price is $100 per wheel set, and the variable production cost per unit is $65. Division 0 of Turbo Corporation currently buys 30,000 wheel sets (of the kind made by Division P) yearly from an outside supplier at a price of $90 per wheel set. Division Q would like to buy the 30,000 wheel sets it needs annually from Division P at $87 per wheel set. What would be the change in annual operating income for the company as a whole, compared to what it is currently?

Reference no: EM133152228

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