The Venus Division of Heinz Ltd produces dilithium crystals. One-third of its output is sold to the Bruno Division, and the remainder is sold externally. Venus's estimated sales and cost data for the coming year are: $$\begin{array} { l c c }
& \underline{\text { Antari Division} } & \underline{\text { External Sales} } \
\text { Units } & 12,500 & 25,000\
\text { Sales } & \$ 18,750 & \$ 50,000 \
\text { Variable costs } & 12,500 & 25,000 \
\text { Fixed costs } & 3,750 & 7,500
\end{array}$$ Assume that Venus cannot sell any additional crystals externally. If the Bruno Division has an opportunity to buy from an outside supplier at $1.40 per crystal and Venus refuses to meet this price, the company as a whole will be:
A) $3,750 worse off
B) $6,250 better off
C) $1,250 better off
D) $5,000 worse off

Question

The Venus Division of Heinz Ltd produces dilithium crystals. One-third of its output is sold to the Bruno Division, and the remainder is sold externally. Venus's estimated sales and cost data for the coming year are: $$\begin{array} { l c c } 
& \underline{\text { Antari Division} } & \underline{\text { External Sales} } \
 \text { Units } & 12,500 & 25,000\
\text { Sales } & \$ 18,750 & \$ 50,000 \
\text { Variable costs } & 12,500 & 25,000 \
\text { Fixed costs } & 3,750 & 7,500
\end{array}$$ Assume that Venus cannot sell any additional crystals externally. If the Bruno Division has an opportunity to buy from an outside supplier at $1.40 per crystal and Venus refuses to meet this price, the company as a whole will be:
A) $3,750 worse off
B) $6,250 better off
C) $1,250 better off
D) $5,000 worse off

Quizplus · Accepted Answer

The Answer of The Venus Division of Heinz Ltd produces dilithium crystals. One-third of its output is sold to the Bruno Division, and the remainder is sold externally. Venus's estimated sales and cost data for the coming year are: $$\begin{array} { l c c } 
& \underline{\text { Antari Division} } & \underline{\text { External Sales} } \
 \text { Units } & 12,500 & 25,000\
\text { Sales } & \$ 18,750 & \$ 50,000 \
\text { Variable costs } & 12,500 & 25,000 \
\text { Fixed costs } & 3,750 & 7,500
\end{array}$$ Assume that Venus cannot sell any additional crystals externally. If the Bruno Division has an opportunity to buy from an outside supplier at $1.40 per crystal and Venus refuses to meet this price, the company as a whole will be:
A) $3,750 worse off
B) $6,250 better off
C) $1,250 better off
D) $5,000 worse off

The Venus Division of Heinz Ltd Produces Dilithium Crystals Assume That Venus Cannot Sell Any Additional Crystals Externally