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Truball Inc., which manufactures sports equipment, consists of several operating divisions. Division A has decided to go outside the company to buy materials since division B plans to increase its selling price for the same materials to $200. Information for division A and division B follows: Outside price for materials Division A's annual purchases Division B's variable costs per unit Division B's fixed costs, per year Division B's capacity utilization $180 13,000 units $170 $1,310,000 1000 Required: 1. Assume that division B cannot sell its materials to outside buyers. Calculate the net cost or benefit to the company as a whole if Division A purchases the materials outside the company 2-a. Assume that division B can save $220,000 in fixed costs if it does not manufacture the material for Division A Calculate the net cost or benefit to the company as a whole for A to purchase outside the company. 2-b. From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside 3-a. Assume the situation in Requirement 1. If the outside market value for the materials drops $23, calculate the net cost or benefit to the company as a whole for A to purchase outside the company 3.b. From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market? market? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Reg JA Rea 38 Assume that division B cannot sell its materials to outside buyers. Calculate the net cost or benefit to the company as a whole Division A purchases the materials outside the company. (Enter all the amounts as positive value) Reg 2A >
Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Reg ЗА Reg 38 Assume that division B can save $220,000 in fixed costs if it does not manufacture the material for Division A. Calculate the net cost or benefit to the company as a whole for A to purchase outside the company. (Enter all the amounts as positive value.) ( Req1 Reg 28 )
Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Req 3A Req 3B From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market? Yes ONO < Req 2A Req 3A >
Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Reg ЗА Reg 38 Assume the situation in Requirement 1. If the outside market value for the materials drops $23, calculate the net cost or benefit to the company as a whole for A to purdhase outside the company. (Enter all the amounts as positive value.) < Reg 28 Req30 >
Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Req 2B Req 3A Red 38 From the standpoint of the effect of the transaction on the company as a whole, should Division A purchase from the outside market? Yes ONO < Req 3A Rega >