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 division 3's income from operations increase?

Increase in income from Operations = $72,000

Explanation:

Current cost of purchasing the inventory = $5 per unit.

Purchase price if bought from Division 6 = $3.20

Net benefit on each unit = $5 - $3.20 = $1.80

Number of units purchased = 40,000

Net savings in Expense of purchase of raw material, which will result in increase in income from operation's by = 40,000 $1.80

= $72,000.00

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.