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The Assembly Division of American Car Company

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The Assembly Division of American Car Company 1. The Assembly Division of American Car Company has offered to purchase 90,000 batteries from the Electrical Division for $104 per unit. At a normal volume of 250,000 batteries per year, production costs per battery are as follows: Direct materials $ 40 Direct manufacturing labor 20 Variable factory overhead 12 Fixed factory overhead 40 Total $112 The Electrical Division has been selling 250,000 batteries per year to outside buyers at $136 each; capacity is 350,000 batteries per year. The Assembly Division has been buying batteries from outside sources for $130 each. Required: a. Should the Electrical Division manager accept the offer ? Explain. b. From the company’s perspective, will the internal sales be of any benefit? Explain. Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help

The Assembly Division of American Car Company

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