2. The price being paid to the outside supplier, net of the quantity dis-
count, is only $63. If the Pulp Division meets this price, then profits in
the Pulp Division and in the company as a whole will drop by $35,000
per year:
Lost revenue per ton ... $70
Outside supplier’s price ... $63
Problem 12-21 (continued)
Profits in the Carton Division will remain unchanged, since it will be
paying the same price internally as it is now paying externally.
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