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 30th are as follows:Sales to LawnProducts DivisionSales to OutsidersRevenueVariable costsFixed costsGross marginUnit sales$ 40,50027,0007,200$ 6,30027,000$ 108,00054,00037,500$ 16,50054,000The Lawn Products Division has an opportunity to purchase, on a continual basis, 27,000 blades (of identical quality) from an outside supplier, at a cost of $1.80 per unit. Assume that the Blade Division cannot sell anyadditional 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 purchasethe blades from the outside supplier, and why?Multiple ChoiceONo, because making the blades would save Dana Company $36,900.No, because making the blades would save Dana Company $16,200.Yes, because buying the blades would save Dana Company $15,300.Yes, because buying the blades would save Dana Company $21,600.No, because making the blades would save Dana Company $21,600.

Dana Company's Blade Division is faced with a critical decision regarding the sale of hardened steel…

The Blade Division of Dana Company produces hardene Blade Division's estimated sales and cost data for the ye Revenue Variable costs Fixed costs Sales to Lawn Products Division $ 40,500 27,000 7,200 Gross margin Unit sales $ 6,300 27,000 The Lawn Products Division has an opportunity to purch additional products to outside customers. Assume, too, the blades from the outside supplier, and why? Multiple Choice No, because making the blades would save De No, because making the blades would save D- Yes, because buying the blades would save D Yes, because buying the blades would save D No, because making the blades would save Da

The Blade Division of Dana Company produces hardene Blade Division's estimated sales and cost data for the ye Revenue Variable costs Fixed costs Sales to Lawn Products Division $ 40,500 27,000 7,200 Gross margin Unit sales $ 6,300 27,000 The Lawn Products Division has an opportunity to purch additional products to outside customers. Assume, too, the blades from the outside supplier, and why? Multiple Choice No, because making the blades would save De No, because making the blades would save D- Yes, because buying the blades would save D Yes, because buying the blades would save D No, because making the blades would save Da

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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