The Blade Division of Dana Company produces hardened steel blades Approximately one third of the Blade Division's output is sold to the Lawn Products Division of Dana the remainder is sold to outside customers Blade Division's estimated sales and cost data for the year ending June 30 th are as follows Sales to Lawn Products Division Sales to Outsiders Revenue $ 31,500 $ 84,000 Variable costs 21,000 42,000 Fixed costs 6,000 28,500 Gross margin $ 4,500 $ 13,500 Unit sales 21,000 42,000 The Lawn Products Division has an opportunity to purchase, on a continual basis, 21,000 blades (of identical quality) from an outside supplier, at a cost of $1 50 per unit Assume that the Blade Division cannot sell any additional products to outside customers Assume, too, that there are no short term avoidable fixed costs Based solely on short term financial considerations, should Dana allow its Lawn Products Division to purchase the blades from the outside supplier, and why

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The Blade Division of Dana Company produces hardened steel blades. Approximately one-third of the Blade Division's output is sold to the Lawn Products Division of

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

	Sales to Lawn Products Division	Sales to Outsiders
Revenue	$ 31,500	$ 84,000
Variable costs	21,000	42,000
Fixed costs	6,000	28,500
Gross margin	$ 4,500	$ 13,500
Unit sales	21,000	42,000

The Lawn Products Division has an opportunity to purchase, on a continual basis, 21,000 blades (of identical quality) from an outside supplier, at a cost of $1.50 per unit. Assume that the Blade Division cannot sell any additional products to outside customers. Assume, too, that there are no short-term avoidable fixed costs. Based solely on short-term financial considerations, should Dana allow its Lawn Products Division to purchase the blades from the outside supplier, and why?