Internal or External Acquisitions:No Opportunity CostsThe 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$15Direct labor10Variable overhead5Fixed overhead19Total$49The 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 $55 per wheel.(a) Calculate the net benefit (or cost) to the Wheel Division of accepting the offer from the Van Division.$___per wheel(b) Calculate the net benefit (or cost) to Motocar Corp. if the Wheel Division accepts the offer from the Van Division.$___ per wheel
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