Division a Sells Ground Veal Internally to Division B, Which

question 17

Multiple Choice

Division A sells ground veal internally to Division B, which in turn, produces veal burgers that sell for $19 per pound. Division A incurs costs of $1.25 per pound while Division B incurs additional costs of $6.50 per pound.
Which of the following formulas correctly reflects the company's operating income per pound?

• A) $19 - ($1.25 + $6.50) = $11.25
• B) $19 - ($3.25 + $6.50) = $9.25
• C) $19 - ($1.25 + $9.75) = $8.00
• D) $19 - ($0.75 + $3.25 + $3.25) = $5.50

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