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A firm has 2 divisions (A nd B )and uses full cost to transfer goods at internal division (B) and External sales.
Internal transfer is at full cost of 28$/unit and external at 30$/unit.
Divison B has got an opportunity to purchase the goods externally at 25$/unit.
Varaible Cost is 20$ Without including 1.5$ saving on internal transfers.
What would be the reduction in the group profit if Division B takes to purchase from external supplier 10,000 units?
could you please help with the same?
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