Answer the Following Question(s)using the Information Below

question 175

Multiple Choice

Answer the following question(s) using the information below:
Greenlawn Ltd.has two divisions, Distribution and Production.The company's primary product is fertilizer.Each division's costs are provided below:
The Distribution Division has been operating at a capacity of 4,000,000 kilograms a week and usually purchases 2,000,000 kilograms from the Production Division and 2,000,000 kilograms from other suppliers at $0.45 per kilogram.
-Assume 100,000 kilograms are transferred from the Production Division to the Distribution Division for a transfer price of $0.40 per kilogram.The Distribution Division sells the 100,000 kilograms at a price of $0.55 each to customers.What is the company's operating income?

• A)$10,000
• B)$15,000
• C)$20,000
• D)$25,000
• E)$0

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Definitions:

Exertion of Power

The act of applying or enforcing one's authority or influence over others.

Labour Union

An organized association of workers formed to protect and further their rights and interests.

Proportional Representation

An electoral system in which the number of seats held by a political party in the legislature is proportionate to the number of votes received by that party in an election.

Political Economy

The interactions of politics, government and governing, and the social and cultural constitution of markets, institutions, and actors.