Materials Used by Beta-Products Inc

question 120

Multiple Choice

Materials used by Beta-Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $15 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 $12 per unit. A transfer price of $13 per unit is established, and 50,000 units of material are transferred with no reduction in Division 6's current sales. How much would Beta-Products total income from operations increase?

• A) $50,000
• B) $150,000
• C) $100,000
• D) $0

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Definitions:

Touchable Object

An object that can be perceived or interacted with through the sense of touch.

Abstractness

A quality of being non-concrete or theoretical, representing ideas or concepts rather than physical realities.

Manufactured Item

A product that has been produced from raw materials through manual labor or machinery, often within an industrial or factory setting, designed for consumer use or further processing.

Clothing

Items worn on the body typically made from fabric, textiles, or animal skins, used for protection, modesty, and symbolic identification.