Division X makes a part with the following characteristics: Production capacity 25,000 units $ 18 :37 Selling price to outside customers. Variable cost per unit Fixed costs, total $ 11 $ 100,000 Division Y of the same company would like to purchase 10,000 units each period from Division X. Division Y now purchases the part at a price of $17 each. Suppose Division X has sufficient excess capacity to handle all of Division Y's needs without any increase in fi: cutting into sales to outside customers. If Division X refuses to accept the $17 price internally and Division Y continues to buy from th company as a whole will be: Multiple Choice О worse off by $70,000 each period. О better off by $10,000 each period. О worse off by $60,000 each period. О worse off by $20,000 each period.

Division X makes a part with the following characteristics: Production capacity 25,000 units $ 18 :37 Selling price to outside customers. Variable cost per unit Fixed costs, total $ 11 $ 100,000 Division Y of the same company would like to purchase 10,000 units each period from Division X. Division Y now purchases the part at a price of $17 each. Suppose Division X has sufficient excess capacity to handle all of Division Y's needs without any increase in fi: cutting into sales to outside customers. If Division X refuses to accept the $17 price internally and Division Y continues to buy from th company as a whole will be: Multiple Choice О worse off by $70,000 each period. О better off by $10,000 each period. О worse off by $60,000 each period. О worse off by $20,000 each period.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6PA: Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit...

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