Tortilla's, Inc. manufactures electronics. It consists of several divisions operating as profit SBU's. Division A...
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Tortilla's, Inc. manufactures electronics. It consists of several divisions operating as profit SBU's. Division A desires to purchase materials from Division B at a price of $85 per unit. Division B can produce 25,000 units at full capacity, and is currently operating at 90% capacity. Currently, it sells only to outside customers. It's customers pay $115 per unit. It incurs variable costs of $80 per unit. Currently, Division A pays an outside company $110 per unit. If Division A purchased from Division B, B's variable costs would be $10 less because it would save money on marketing costs. Division A requires 10,000 units. Problem 2.1 From Division A's perspective the net benefit (cost) is?
Net benefit of $850,000. Net cost of $350,000. Net benefit of $250,000 Net cost of $50,000
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