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What is division as operating income per pound assuming the

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 $0.80 per pound and Division B incurs additional costs of $3 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?

$0.45
$0.875
$1.25
$1.625

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Accounting Basics: What is division as operating income per pound assuming the

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