Alcatraz Division of XYZ Corp. sells 80,000 units of part X to the outside market. Part X sells for $40, has a variable cost of $22, and a fixed cost pe unit of $10. Alcatraz has a capacity to produce 100,000 units per period. Capone Division currently purchases 10,000 units of part X from Alcatraz for $40. Capone has been approached by an outside supplier willing to supply the parts for $36. What is the effect on XYZ's overall profit if Alcatraz REFUSES the outside price and Capone decides to buy outside? $40,000 increase in XYZ profits O $140,000 decrease in XYZ profits O $80,000 decrease in XYZ profits no change

Alcatraz Division of XYZ Corp. sells 80,000 units of part X to the outside market. Part X sells for $40, has a variable cost of $22, and a fixed cost pe unit of $10. Alcatraz has a capacity to produce 100,000 units per period. Capone Division currently purchases 10,000 units of part X from Alcatraz for $40. Capone has been approached by an outside supplier willing to supply the parts for $36. What is the effect on XYZ's overall profit if Alcatraz REFUSES the outside price and Capone decides to buy outside? $40,000 increase in XYZ profits O $140,000 decrease in XYZ profits O $80,000 decrease in XYZ profits no change

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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