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Blossom International Corporation has two divisions, Division A and Division B. Division A produces a motor that sells for $82 per unit, with the following
Blossom International Corporation has two divisions, Division A and Division B. Division A produces a motor that sells for $82 per unit, with the following costs based on its capacity of 187,000 units: Direct materials $30 Direct labour 23 Variable overhead Fixed overhead Division A is operating at 70% of normal capacity and Division B is purchasing 20,500 units of the same component from an outside supplier for $77 per unit. Calculate the benefit, if any, to Division A in selling to Division B the 20.500 units at the outside supplier's price
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