The West Division of National Company is buying 10,000 ventilators from an outside supplier at $36 per unit. National's East Division, which is producing and selling at full capacity (12,000 units), has the following sales and cost structure: Sales price per unit $50.00 Variable cost per unit 22.50 Fixed cost (at capacity) per unit 11.00 If the East Division meets the outside supplier's price and sells the 10,000 ventilators to West, the effect on overall company profits will be: A. $275.000 lower B. $150,000 lower C. $140,000 lower D. $360,000 higher
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The West Division of National Company is buying 10,000 ventilators from an outside supplier at $36 p...
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