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asy Fit Ltd . manufactures heating, ventilation, and air conditioning ( HVAC ) equipment. The Manufacturing Division creates parts, and the Assembly Division builds and

asy Fit Ltd. manufactures heating, ventilation, and air conditioning (HVAC) equipment. The Manufacturing Division creates parts, and the Assembly Division builds and sells the equipment. The Manufacturing Division sells furnace parts packages to the Assembly Division. The market price for the Assembly Division to purchase a mini furnace is $3,500. The fixed costs for the Manufacturing Division are assumed to be the same over the range of 2,000-5,000 units. The fixed costs for the Assembly Division are assumed to be $40.00 per unit at 5,000 units.
Manufacturing Division costs per furnace:
Direct materials $1,300.00
Direct labour $350.00
Variable overhead $100.00
Division fixed costs $90.00
Assembly Division costs per completed furnace:
Direct materials $25.00
Direct labour $150.00
Variable overhead $50.00
Division fixed costs $40.00
If the Assembly Division sells 1,000 furnaces at a price of $3,500 per unit to customers, what is the companys operating income?

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