(Solved):Given the following information for Division K: Selling price to outside customers $60 Variable…

 

Question

Given the following information for Division K:

Selling price to outside customers $ 60
Variable cost per unit $ 34
Total fixed costs $ 400,000
Capacity in units 25,000

Division L would like to purchase internally from Division K. Division L now purchases 6,000 units each period from outside suppliers at $57 per unit. Division K has ample excess capacity to handle all of Division L’s needs. What is the lowest

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