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zepelin [54]
4 years ago
15

Division A makes a part with the following characteristics: Production capacity in units 32,900 units Selling price to outside c

ustomers $ 22 Variable cost per unit $ 18 Total fixed costs $ 103,400 Division B, another division of the same company, would like to purchase 15,200 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 has ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division A refuses to accept the $20 price internally and Division B continues to buy from the outside supplier, the company as a whole will be:
Business
1 answer:
DochEvi [55]4 years ago
3 0
The A division refused to accept 20$ because he think he’s worth more than that of division B
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