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  3. thornton company has two divisions, a and b. divis

Thornton Company has two divisions, A and B. Division A manufactures 5,900 units of product...

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Accounting

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Thornton Company has two divisions, A and B. Division A manufactures 5,900 units of product per month. The cost per unit is calculated as follows. Variable costs Fixed costs Total cost $ 7.90 20.90 $28.80 Division B uses the product created by Division A. No outside market for Division A's product exists. The fixed costs incurred by Division A are allocated headquarters-level facility-sustaining costs. The manager of Division A suggests that the product be transferred to Division B at a price of at least $28.80 per unit. The manager of Division B argues that the same product can be purchased from another company for $19.50 per unit and requests permission to do so. Required a-1. How much would the division gain or lose if Division B were to purchase the product from the outside company for $19.50 per unit? (Round your answer to 2 decimal places.) a-2. Is it in the best interest of Thornton Company for Division B to purchase the product from an outside company? per unit a-1. Division's gain or loss a-2. Should Thornton purchase the product from outside

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