Crane Corporation is a local manufacturing company with two divisions - Division A and Division B, each of which operates as an independent profit centre. Division it requires highly skilled and trained employees due to the nature of its products. Currently Division A manufactures the widget and gadget. Cost information for both products is in Exhibit One. Annual overhead in Division A totals $500,000, all xed. Due to the high skill level required, Division A's capacity is set at 55,000 hours per year. One customer orders a maximum of 20,000 widgets per year, at a price of $?0 per widget. If Crane cannot provide the full order, the customer will accept partial orders. The rest of Division A's capacity is used for production of the gadget, for which there is unlimited demand at a price of $15 per unit. Division B only produces one product, the (2300. Sales and cost information are provided in Exhibit Two. A joint research project has determined that a single widget can be substituted for the current direct materials used to make 0300. Using the widget would require one extra hour of labour per (2300 for a new total of five hours per (2300. Exhibit Dne Division A Cost Information Widget Direct materials $5.00 Direct labour [2 hours at $16; 0.5 hours 1:516}: 32.00 Exhibit Two Division B Revenue a Cost Information C300 Gadget $4.00 8.00 Selling price $135.00 Direct materials T000 Direct labour {4 hours x $15) 60.00 Fixed overhead 80,000