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Simens, SA, a Swiss transportation equigment manulacturer, is heaviy decentralzed. Each division head has full autherijy on all decisions regarding sales to internal or extemal customers. The Becn division has always acquired a certain equpment component from the Geneva division. The Geneva division recently acquired specialzed equipment that is used primarily to make this component. The Geneva division has informed the Luceme division that their fxed costs have increased by CHF 25 per unit because of the depreciabon charges on the newe equipment, so the unt price will be increased to CHF 270. However, the Bern division's management has now decided to purchase the component from outside suppliers at a price of CHF 245. The Geneva division has suppled the following production cost cate tor this component. (Cick the icon to view the data) Read the ceaurements Requirement 1, Suppose there are no altematve uses of the Geneva facities and that fixed costs wil consive it Geneva no longer produces the component for Bem Wa ithe company as a whole benetit if the Bern division beys from the cuiside supplen for ciff 245 per uns? 5 how computations to support your answer Beoin by compieting the table below to caiculate the nat cost (benefin) to the company as a whole. (Enter a not benefir usirg sarentheses sr a minus sign) Data table 1. Suppose there are no alternative uses of the Geneva facilities and that fixed costs will continue if Geneva no longer produces the component for Bern. Will the company as a whole benefit if the Bern division buys from the outside suppliers for CHF 245 per unit? Show computations to support your answer. 2. Suppose there is an alternative use for the Geneva facilities. If the Geneva facilities are used to produce the component for the Bern division, the Geneva division will give up a contribution of CHF 65,000 from this alternative use. Should the Bern division purchase from outsiders at CHF 245 per unit? 3. Suppose that there are no alternative uses for Geneva's internal facilities and that the outsiders' selling price drops by CHF 15 to CHF 230 . Should the Bern division purchase from outsiders? 4. As the president, how would you respond if the Geneva division manager's requests that you require the Bern division to purchase the component from Geneva? Would your response differ depending on the specific situations described in numbers 13 ? Why? Simens, SA, a Swiss transportation equigment manulacturer, is heaviy decentralzed. Each division head has full autherijy on all decisions regarding sales to internal or extemal customers. The Becn division has always acquired a certain equpment component from the Geneva division. The Geneva division recently acquired specialzed equipment that is used primarily to make this component. The Geneva division has informed the Luceme division that their fxed costs have increased by CHF 25 per unit because of the depreciabon charges on the newe equipment, so the unt price will be increased to CHF 270. However, the Bern division's management has now decided to purchase the component from outside suppliers at a price of CHF 245. The Geneva division has suppled the following production cost cate tor this component. (Cick the icon to view the data) Read the ceaurements Requirement 1, Suppose there are no altematve uses of the Geneva facities and that fixed costs wil consive it Geneva no longer produces the component for Bem Wa ithe company as a whole benetit if the Bern division beys from the cuiside supplen for ciff 245 per uns? 5 how computations to support your answer Beoin by compieting the table below to caiculate the nat cost (benefin) to the company as a whole. (Enter a not benefir usirg sarentheses sr a minus sign) Data table 1. Suppose there are no alternative uses of the Geneva facilities and that fixed costs will continue if Geneva no longer produces the component for Bern. Will the company as a whole benefit if the Bern division buys from the outside suppliers for CHF 245 per unit? Show computations to support your answer. 2. Suppose there is an alternative use for the Geneva facilities. If the Geneva facilities are used to produce the component for the Bern division, the Geneva division will give up a contribution of CHF 65,000 from this alternative use. Should the Bern division purchase from outsiders at CHF 245 per unit? 3. Suppose that there are no alternative uses for Geneva's internal facilities and that the outsiders' selling price drops by CHF 15 to CHF 230 . Should the Bern division purchase from outsiders? 4. As the president, how would you respond if the Geneva division manager's requests that you require the Bern division to purchase the component from Geneva? Would your response differ depending on the specific situations described in numbers 13 ? Why

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