Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to

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Division A Manufactures Electronic Circuit Boards The Boards Can Be Sold Either To Division B Of The Same Company Or To 1 (41.6 KiB) Viewed 33 times

Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A Selling price per circuit board Variable cost per circuit board Number of circuit boards: $ 193 $ 117 Produced during the year Sold to outside customers Sold to Division B 21,300 14,200 7,100 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic Instrument manufactured by that division (one board per instrument). Division B incurred $250 in additional variable cost per instrument and then sold the instruments for $630 each. Required: 1. Calculate the net operating incomes earned by Division A, Division Band the company as a whole. 2. Assume Division A's manufacturing capacity is 21,300 circuit boards. Next year, Division B wants to purchase 8,100 circuit boards from Division A rather than 7,100. (Circuit boards of this type are not available from outside sources) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Required 11 Required 21