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$ 102,000 me same company, would like to purchase 12,800 units of the part each period from Division A. Division Bis outside supplier at a price of $20 each. ating at capacity and can sell all of its output to outside customers at its usual selling price. If Division A agre er unit, the company as a whole will be:

$ 102,000 me same company, would like to purchase 12,800 units of the part each period from Division A. Division Bis outside supplier at a price of $20 each. ating at capacity and can sell all of its output to outside customers at its usual selling price. If Division A agre er unit, the company as a whole will be:

FINANCIAL ACCOUNTING
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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Division A makes a part with the following characteristics: Production capacity in units. Selling price to outside customers Variable cost per unit Total fixed costs 34,200 units $22 $ 17 102,000 $ Division B, another division of the same company, would like to purchase 12,800 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $20 each. Suppose that Division A is operating at capacity and can sell all of its output to outside customers at its usual selling price. If Division A agrees to sell the parts to Division B at $20 per unit, the company as a whole will be:
Transcribed Image Text:Division A makes a part with the following characteristics: Production capacity in units. Selling price to outside customers Variable cost per unit Total fixed costs 34,200 units $22 $ 17 102,000 $ Division B, another division of the same company, would like to purchase 12,800 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $20 each. Suppose that Division A is operating at capacity and can sell all of its output to outside customers at its usual selling price. If Division A agrees to sell the parts to Division B at $20 per unit, the company as a whole will be:
Multiple Choice O O O O better off by $25,600 each period. worse off by $51,200 each period. There will be no change in the status of the company as a whole. worse off by $25,600 each period.
Transcribed Image Text:Multiple Choice O O O O better off by $25,600 each period. worse off by $51,200 each period. There will be no change in the status of the company as a whole. worse off by $25,600 each period.
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