Division A which is operating at capacity, produces a component that currently sells in a competitive...

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Division A which is operating at capacity, produces a component that currently sells in a competitive market for $20 per unit

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Answer 1

Answer #1

When division operates at spare capacity charges is equal to variable cost per unit but when division operates at capacity charges is equal to variable cost+Contribution to be lost

So Answer is c) $20 per unit

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Answer 2

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