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(Solved by Expert Tutors) Crede Inc. has two divisions. Division A makes and sells student desks.


Division B manufactures and sells reading lamps.


Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10 from an outside vendor. Division A needs 12,300 lamps for the coming year.


Division B has the capacity to manufacture 48,500 lamps annually. Sales to outside customers are estimated at 36,200 lamps for the next year. Reading lamps are sold at $11 each. Variable costs are $7 per lamp and include $1 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $103,320.


Consider the following independent situations.

 


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DATE ANSWERED

Apr 19, 2020

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