Answer the Following Question(s)using the Information Below

question 171

Multiple Choice

Answer the following question(s) using the information below.Easy Fit Ltd.manufactures heating, ventilation, and air conditioning (HVAC) equipment.The Manufacturing Division creates parts; and, the Assembly Division builds and sells the equipment.The Manufacturing Division "sells" furnace parts packages to the Assembly Division.The market price for the Assembly Division to purchase a mini furnace is $3,500.The fixed costs for the Manufacturing Division are assumed to be the same over the range of 2,000-5,000 units.The fixed costs for the Assembly Division are assumed to be $40.00 per unit at 5,000 units.Manufacturing costs per furnace are:
Assembly's costs per completed furnace are:

-If the Assembly Division sells 1,000 furnaces at a price of $3,500 per unit to customers, what is the company's operating income?

• A)$3,250,000
• B)$175,000
• C)$1,660,000
• D)$3,235,000
• E)$1,395,000

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Definitions:

Cold Currents

Ocean currents that originate in polar regions and move towards the equator, affecting the climate and marine life of the areas they flow through.

Warm Front

The sloping boundary between an advancing warm air mass and a cooler air mass.

Gulf Stream

A powerful, warm ocean current that flows from the Gulf of Mexico along the eastern coast of the United States and across the Atlantic Ocean.

Supercell Thunderstorms

Highly organized and severe thunderstorms characterized by a deep, persistently rotating updraft, capable of producing damaging winds, large hail, and tornadoes.