Problem
Assume that Olivia has found another buyer for the batteries her division produces who is willing to pay $10,900 per battery. This potential new buyer is also located in Canada so the variable shipping costs for the Battery division would be reduced to $90 per unit. Would AMP Industries want the Battery division to sell externally or internally? Assume a price of $11,280 per unit if sold internally - also assume the same number of batteries would be sold internally or externally (12,300) and that the Battery division does not have excess capacity.