Materials used by the industrial divition of crow manufacturing are currently purchased by outside suppliersat a cost of $120. per unit. However the same materials are available from the materials division. The materilas division has unused capacity and can produce the materials needed by the Industrial division at a variable cost of $95 dollars per unit.
A) if a transfer price of $105 per unit is established and 40,000 units of materials are transferred, with no reduction in the materials division current sales, how much would Crow manufacturings total income from operations increase??
B) How much would the Industrial divisions income from operations increase?
C) How much would the materials division s income from operations increase??