Answer the following questions using the information below:
Division A sells ground veal internally to Division B, which in turn, produces veal burgers that sell for $10 per pound. Division A incurs costs of $1.50 per pound while Division B incurs additional costs of $5.00 per pound.
-What is Division A's operating income per pound, assuming the transfer price of the ground veal is set at $2.50 per pound?
A)$1.00
B)$1.75
C)$2.50
D)$3.25

Question

Quizplus · Accepted Answer

Division A's operating income per pound is the transfer price minus its costs: $2.50 - $1.50 = $1.00.

Answer the Following Questions Using the Information Below