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Division a Sells Ground Veal Internally to Division B, Which

Question 142

Multiple Choice

Division A sells ground veal internally to Division B, which in turn, produces veal burgers that sell for $12 per pound. Division A incurs costs of $5.25 per pound while Division B incurs additional costs of $11.50 per pound.
What is Division A's operating income per burger, assuming the transfer price of the ground veal is set at $7.00 per burger?


A) $1.75
B) $2.25
C) $8.75
D) $4.50

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