Paper , Order, or Assignment Requirements

Internal or External Acquisitions: No Opportunity Costs The Van Division of MotoCar Corporation has offered to purchase 180,000 wheels from the Wheel Division for $42 per wheel. At a normal volume of 500,000 wheels per year, production costs per wheel for the Wheel Division are as follows: Direct materials $15 Direct labor 10 Variable overhead 5 Fixed overhead 19 Total $49 The Wheel Division has been selling 500,000 wheels per year to outside buyers at $59 each. Capacity is 700,000 wheels per year. The Van Division has been buying wheels from outside suppliers at $55 per wheel. (a) Calculate the net benefit (or cost) to the Wheel Division of accepting the offer from the Van Division. $Answer Incorrect per wheel (b) Calculate the net benefit (or cost) to Motocar Corp. if the Wheel Division accepts the offer from the Van Division. $Answer Incorrect per wheel