turbo corporation change in net income 407958
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Division P of Turbo Corporation has the capacity for making 140,000 wheel sets per year and regularly sells 105,000 each year on the outside market. The regular sales price is $100 per wheel set, and the variable production cost per unit is $73. Division Q of Turbo Corporation currently buys 37,300 wheel sets (of the kind made by Division P) yearly from an outside supplier at a price of $94 per wheel set. If Division Q were to buy the 37,300 wheel sets it needs annually from Division P at $89 per wheel set, the change in annual net operating income for the company as a whole, compared to what it is currently, would be:
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turbo corporation change in net income 407958
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| A) | $1,400,000 |
| B) | $721,200 |
| C) | $631,200 |
| D) | $1,050,000 |
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