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Bon treats its divisions as profit centers and allows division managers to choose whether to sell or to buy from internal division. Corporate policy requires
Bon treats its divisions as profit centers and allows division managers to choose whether to sell or to buy from internal division. Corporate policy requires that all interdivision sales and purchases be transferred at variable cost.
Gamma Division of Bon Corporation produces electric motors. This product is currently sold to outside customers but is needed by Omega, another division of Bon. Gamma Division's estimated sales and standard cost data for the year ended December 31, based on practical capacity of 60,000 units are as follows:
Cteoritribution Mergin Operating coUTES 7,200,000.00 38,200,000.00 28,900,000,00 1,0/5,000.00 2,825,000.00
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