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Materials Used by Square Yard Products Inc

question 101

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Materials used by Square Yard Products 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 materials needed by Division 3 at a variable cost of $3 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.
How much will Division 6's income from operations increase?

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Definitions:

DNA Sequences

DNA sequences are the specific arrangements of nucleotides (adenine, thymine, cytosine, and guanine) on a strand of DNA that encode the genetic information of an organism.

Gene Flow

Describes the movement, or migration, of alleles from one population to another.

Genetic Drift

Genetic drift is evolution arising from random changes in the genetic composition of a population from one generation to the next.

Phylogenetic Tree

A diagram that depicts the evolutionary relationships among various biological species or entities based upon similarities and differences in their physical and/or genetic characteristics.

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