Materials Used by Square Yard Products Inc

question 136

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.​
-Division 3's operating income will increase by

• A)$150,000
• B)$50,000
• C)$32,000
• D)$72,000

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Definitions:

Social Control

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Michel Foucault

A French philosopher and social theorist known for his influence on critical theory and studies of power, knowledge, and discourse.

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An act in which a person intentionally sexually touches another person without that person's consent, or coerces or physically forces a person to engage in a sexual act against their will.

Social Scientists

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