Materials used by the company in producing division cs

Reference no: EM13569355

Materials used by the company in producing Division C's product are currently purchased from outside suppliers at a cost of $15 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $10.00 per unit. A transfer price of $11.00 per unit is negotiated and 60,000 units of material are transferred, with no reduction in Division A's current sales. How much would Division A's income from operations increase?

Reference no: EM13569355

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