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

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Chapter10: Short-term Decision Making
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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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