Answer the Following Question(s) Using the Information Below

question 2

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 operating income of both divisions together?

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

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Definitions:

Heart Surgery

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A surgical procedure in which a failing or diseased heart is replaced with a healthier donor heart.

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A condition characterized by abnormally high levels of lipids (fats) in the blood, which can increase the risk of cardiovascular disease.