Division Y sells soybean paste internally to Division Z, which, in turn, produces soybean burgers that sell for $5 per pound.Division Y incurs costs of $0.75 per pound, while Division Z incurs additional costs of $2.50 per pound.Identify which of the following formulas correctly reflects the company's operating income.
A)$5.00 - $0.75 + $2.50) = $1.75
B)$5.00 - $1.25 + $2.50) = $1.25
C)$5.00 - $0.75 + $3.75) = $0.50
D)$5.00 - $0.25 + $1.25 + $3.50) = $-0-

Question

Quizplus · Accepted Answer

Division Y incurs costs of $0.75 per pound, while Division Z incurs additional costs of $2.50 per pound. So the total cost is $0.75 + $2.50 = $3.25 per pound. The selling price is $5 per pound. So the operating income is $5 - $3.25 = $1.75 per pound.

Division Y Sells Soybean Paste Internally to Division Z, Which