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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


 Materials used by Square Yard Products Inc. in producing Division 3s product are currently purchased from outside suppliers

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. 27. How much would Division 3's income from operations increase? a. $150,000 b. $50,000 c. $32,000 d. $72,000 28. How much would Division 6's income from operations increase? $8,000 b. $15,000 a. c. $80,000 d. $150,000 29. How much would Square Yard Products total income from operations increase? $32,000 b. $112,000 a. c. $80,000 d. $150,000 ABC Corporation has three service departments with the following costs and activity base: Service Department Graphics Production Accounting Personnel Department Activity Base for Allocation of copies # of invoices processed # of employees Cost $200,000 $500,000 $400,000 ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information are as follows: Micro Direct Revenues Direct Operating Expenses # of copies made # invoices processed #of employees Super $650,000 S100.000 50,000 500 S700,000 $50,000 20,000 $850,000 $70,000 30,000 700 800 130 145 125 30. What is the service department charge rate for Graphics Production? $2.00 b. $10.00 c. $6.66 d. $.50 a.

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