Answer the Following Questions Using the Information Below

Multiple Choice

Answer the following questions using the information below:
Division A sells potatoes internally to Division B, which in turn, produces chips that sell for $10 per pound. Division A incurs costs of $1.50 per pound while Division B incurs additional costs of $5.00 per pound.
-Which of the following formulas correctly reflects the company's operating income per pound?

A) $10.00 - ($0.50 + $2.50 + $7.00) = 0
B) $10.00 - ($1.50 + $7.50) = $1.00
C) $10.00 - ($2.50 + $5.00) = $2.50
D) $10.00 - ($1.50 + $5.00) = $3.50