Question: Division A sells soybean paste internally to Division B, which, in turn, produces soybean burgers that sell for $5 per pound. Division A incurs costs

Division A sells soybean paste internally to Division B, which, in turn, produces soybean burgers that sell for $5 per pound. Division A incurs costs of $0.75 per pound and Division B incurs an additional cost of $2.50 per pound. What is Division A's operating income per pound, assuming the transfer price of the soybean paste is set at $1.25 per pound?

$0.50

$0.875

$1.250

$1.625

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