Calculatormaterials 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 will division 3's income from operations increase

Total increase in operating income = $1.80 40,000 units = $72,000.

Explanation:

Division 6 can produce the product required by Division 3 at the variable cost of $3.00 since it has an ideal capacity left, thus no other fixed cost will be incurred.

Further provided Division 3 buys it from outside suppliers at the rate of $5.00, now it can buy from Division 6 at the rate of $3.20 per unit.

Therefore it will save about $5.00 - $3.20 = $1.80 per unit, which will increase its operating income with the same, therefore

Total increase in operating income = $1.80 40,000 units = $72,000.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

disadvantages of leasing a vehicle: no vehicle equity and mileage limitations

disadvantages of purchasing a vehicle: large down payment and vehicle depreciation

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