Materials Used by Square Yard Products Inc

question 66

Multiple Choice

Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5.00 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3.00 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales.​
-Square Yard Products Inc.'s total operating income will increase by

• A)$32,000
• B)$112,000
• C)$80,000
• D)$150,000

---

Definitions:

Default Constructor

A constructor that takes no arguments. In Java, if no constructors are explicitly defined for a class, the compiler provides a default constructor.

Reference Variable

A variable that holds references to objects in languages like Java, unlike primitive variables that hold the data itself.

Class

A blueprint from which individual objects are created in object-oriented programming, defining a set of properties and methods applicable to all objects of that type.