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DHR Products, Inc. has an Antennae Division that manufactures and sells a number of products, including a standard antenna that can be used by another

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DHR Products, Inc. has an Antennae Division that manufactures and sells a number of products, including a standard antenna that can be used by another division in the company, the Aircraft Products Division, in one of its products. Data concerning the antennae appear below: Capacity in units 86,000 Selling price to outside $63 per unit customers Variable cost per $22 per unit unit Fixed cost per unit (based on capacity) $18 per unit The Aircraft Products Division is currently purchasing 5,000 of these antennae per year from an international supplier at a cost of $57 per antenna. Assume the Antennae Division has enough capacity to provide the units to Aircraft Products without interfering with its regular sales and without incurring additional fixed costs. Also, assume $7 in variable costs can be avoided on transfers within the company due to reduced shipping and selling costs. From the firm's perspective, what is the financial advantage (or disadvantage) of internal trade at DHR Products? $35,000 financial disadvantage $210,000 financial advantage $250,000 financial advantage $175.000

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