The Blade Division of Dana Company produces hardened steel blades. One-third of the Blade Division's output is sold to the Lawn Products Division of Dana; the remainder is sold to outside customers. The blade Division's estimated sales and standard cost data for the fiscal year ending June 30, 1981, are as follows:

	Lawn products	Outsiders
Sales	$15,000	$40,000
Variable costs	(10,000)	(20,000)
Fixed costs	(3,000)	(6,000)
Gross margin	$2,000	$14,000
Unit sales	10,000	20,000

The Lawn Products Division has an opportunity to purchase 10,000 identical quality blades from an outside supplier at a cost of $1.25 per unit on a continuing basis. Assume that the Blade Division cannot sell any additional products to outside customers. Should Dana allow its Law Products Division to purchase the blades from the outside supplier, and why?

Question 13 options:

A)	Yes, because buying the blades would save Dana Company $500.

B)	No, because making the blades would save Dana Company $2,500.

C)	No, because making the blades would save Dana Company $1,500.

D)	Yes, because buying the blades would save Dana Company $2,500.