Anastasia Industries has two divisions: Blending and Packaging. The Packaging Division is looking to obtain 20,000 units annually of specialized component product from Blending Division. The special components have variable costs of $260 per unit in variable production costs for Blending Division. However, the Packaging Products Division has a bid from an outside supplier of $445 per unit. To meet the requirements of the Packaging Division, Blending would have to cut back production of an existing product. This product sells for $565 per unit and requires $369 per unit in variable production costs. Packaging and shipping costs of the existing product are $12 per unit, but these would be reduced by 75% for the specialized component for Packaging. Blending currently sells 120,000 units of the existing product and this volume would have to be reduced by 25% to meet the Packaging Division's demand. Should the transfer take place? Briefly explain.

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