Division Y Sells a Food Product Internally to Division Z

question 87

Multiple Choice

Division Y sells a food product internally to Division Z.Division Z uses the food product to produce vegetarian burgers that sell for $5 per pound.Division Y incurs costs of $0.75 per pound to produce the food product and sells the food product to Division Z for $1.00 per pound.Division Z incurs additional costs of $2.50 per pound to produce the final product of vegetarian burgers.Division Z can purchase the food product needed from outside suppliers for $0.75 per pound,but does not do so.Which formula should be used to determine the company's operating income?

• A)$5.00 - $0.75 - $1.00 - $0.75 - $2.50 = 0
• B)$5.00 - $0.75 - $1.00 - $2.50 = $0.75
• C)$5.00 - $0.75 - $2.50 = $1.75
• D)$5.00 - $0.75 - $1.00 + $0.75 = $4.00

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Definitions:

Racial Minority

A group of people identified by their race who make up a smaller percentage of the total population than the majority group.

Labor Market

The supply of available workers in relation to available work.

Wages

The monetary compensation paid by employers to employees for their labor, typically calculated on an hourly, daily, or piecework basis.

Segregation

The act or state of separating or being separated into different groups based on characteristics such as race, gender, or religion, often leading to unequal treatment or opportunities.