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Holiday Corp. has two divisions, Quail and Marlin. Quail produces a widget that Marlin could use in its production. Quail's variable costs are $5.20 per widget while the full cost is $8.20. Widgets sell on the open market for $14.40 each. If Quail has excess capacity, what would be the cost savings if the transfer were made and Marlin currently is purchasing 160,000 units on the open market? Multiple Choice $0 $1,312,000 $1,472,000 $2,304,000 оо

Holiday Corp. has two divisions, Quail and Marlin. Quail produces a widget that Marlin could use in its production. Quail's variable costs are $5.20 per widget while the full cost is $8.20. Widgets sell on the open market for $14.40 each. If Quail has excess capacity, what would be the cost savings if the transfer were made and Marlin currently is purchasing 160,000 units on the open market? Multiple Choice $0 $1,312,000 $1,472,000 $2,304,000 оо

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Holiday Corp. has two divisions, Quail and Marlin. Quail produces a widget that Marlin could use in its production. Quail's variable costs are $5.20 per widget while the full cost is $8.20. Widgets sell on the open market for $14.40 each. If Quail has excess capacity, what would be the cost savings if the transfer were made and Marlin currently is purchasing 160,000 units on the open market? Multiple Choice $0 $1,312,000 $1,472,000 $2,304,000
Transcribed Image Text:Holiday Corp. has two divisions, Quail and Marlin. Quail produces a widget that Marlin could use in its production. Quail's variable costs are $5.20 per widget while the full cost is $8.20. Widgets sell on the open market for $14.40 each. If Quail has excess capacity, what would be the cost savings if the transfer were made and Marlin currently is purchasing 160,000 units on the open market? Multiple Choice $0 $1,312,000 $1,472,000 $2,304,000
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