Materials Used by Square Yard Products Inc

question 55

Multiple Choice

Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. How much would Square Yard Products total income from operations increase?

• A) $32,000
• B) $112,000
• C) $80,000
• D) $150,000

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Definitions:

Impulses

Sudden, involuntary urges to act or think in a particular way, often without conscious reasoning.

Fight Or Flight

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival.

Nervous System

The complex network of nerve cells and fibers that transmits nerve impulses between parts of the body, coordinating its actions and sensory information.

Autonomic Nervous

This refers to the autonomic nervous system, which regulates involuntary bodily functions such as heart rate, digestion, and respiratory rate.