Accounting
posted by Tee on .
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

The answer for this question is not here. The answer is $72,000