I would like to see the logic in figuring this out - not just the answer.

7) North Division sells a part internally to South Division. South Division uses the part to produce inexpensive products sold at discount stores. North Division incurs costs of $1.50 per part, while South Division incurs additional costs of $4.80 per product. North Division sells the part to South Division for $2.00 per part. The final product is sold to external customers for $8.00 each. Which of the following formulas correctly reflects the company's operating income? A) $8.00-$1.50-$4.80 $1.70 C) $8.00-$1.50-$4.80 - $2.00= $(0.30) B) $8.00-$1.50= $6.50 D) $8.00 -$4.80-$2.00-$1.20