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Discuss the factors Holmes should consider

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Problem - Holmes and Watson are divisions of Doyle, Inc., operating as profit centers. Both are profitable. One of the products produced by Holmes is A62, which normally sells for $260/unit. Cost is $175/unit (60% variable).Watson is planning a new product, and is taking bids on one of the subassemblies. A62 would be appropriate for this subassembly.

Required -

a) Discuss the factors Holmes should consider when submitting a bid.

b) If Holmes does not submit the low bid, might Watson still benefit from accepting their bid? Discuss briefly.

Reference no: EM132472644

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