Question

ASAP!!!

Kelowna Company has two divisions, A and B. Division A manufactures 12,000 units of product per month. The cost per unit is calculated as follows. Variable costs $ 10 Fixed costs Total cost $ Division B uses the product created by Division A. No outside market for Division A's product exists. The fixed costs incurred by Division A are allocated headquarters-level facility-sustaining costs. The manager of Division A suggests that the product be transferred to Division B at a price of at least $30 per unit. The manager of Division B argues that the same product can be purchased from another company for $26 per unit and requests permission to do so. a-1. How much would the division gain or lose if Division B were to purchase the product from the outside company for $26 per unit?

Answer 1

2-1 Ao there is no outside market for product of Division A So, sale price per count is $0 less total cost (630) مل - 30 And Division B has to purchase product from outside snarket. 196 Division or Hells Farochuck to Division B then Company will carn Contribution of & $ 16. هظبط نموها 26 د ID = $16