Materials used by Square Yard Product Inc, in producing Division 3\'s product ar
ID: 2493736 • Letter: M
Question
Materials used by Square Yard Product Inc, in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit, However, the same materials are available from Division 6 Division 6 has unused capacity and can produce the material needed by Division 3 at variable cost of $3 per unit. A transfer price of $3.20 per unit n established, and 40.000 units of material are transferred with do reduction in Division6 s current sales. How much would Square Yard Products total income from operations increase $150,000 $112,000 $32,000 $80,000Explanation / Answer
Square yard products total income from operations increase by 40000 units @ $ 2 per unit = $ 80000