Altoona Corporation has two divisions, Hinges and Doors, which are both organized as profit centers; the Hinge Division produces and sells hinges to the Door Division and to outside customers. The Hinge Division has total costs of $39, $24 of which are variable. The Hinge Division is operating significantly below capacity and sells the hinges for $54.
The Door Division has received an offer from an outsider vendor to supply all the hinges it needs (30,000 hinges) at a cost of $49. The manager of the Door Division is considering the offer but wants to approach the Hinge Division first.
What would be the profit impact to Altoona Corporation as a whole if the Door Division purchased the 30,000 hinges it needs from the outside vendor for $49?
A) No change in profit to Altoona.
B) $150,000 increase in profits.
C) $150,000 decrease in profits.
D) $750,000 decrease in profits.