The Blade Division of Axe Company produces hardened steel blades. Blades' estimated operating profit for the...

 

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The Blade Division of Axe Company produces hardened steel blades. Blades' estimated operating profit for the year is: Sales Variable costs Fixed costs Forestry Division 15,000.24 10,100.00 3,333.33 Operating profits. Unit sales per unit 1,566.91 10,000 A contract company has offered to sell Axe Company the steel blades used in the Forestry Division for $1.25 per unit. $2,742.11 of the fixed cost for that division can be saved by contracting out the steel blades. a. What will be the price difference between continuing to make the steel blades and buying the steel And should the company continue to make the steel blades or buy the steel blades? b. What quantity of blades will result in no difference in profit being realized whether the blades are continued to be made or are bought from the contract company? The Blade Division of Axe Company produces hardened steel blades. Blades' estimated operating profit for the year is: Sales Variable costs Fixed costs Forestry Division 15,000.24 10,100.00 3,333.33 Operating profits. Unit sales per unit 1,566.91 10,000 A contract company has offered to sell Axe Company the steel blades used in the Forestry Division for $1.25 per unit. $2,742.11 of the fixed cost for that division can be saved by contracting out the steel blades. a. What will be the price difference between continuing to make the steel blades and buying the steel And should the company continue to make the steel blades or buy the steel blades? b. What quantity of blades will result in no difference in profit being realized whether the blades are continued to be made or are bought from the contract company?