Materials used by Jefferson Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10.00 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 25,000 units of material are transferred, with no reduction in Division A's current sales.

Jefferson Company's total operating income will increase by

a.$37,500

b.$62,500

c.$150,000

d.$100,000

Jacoby Company received an offer from an exporter for 27,700 units of product at $19 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:

Domestic unit sales price	$22
Unit manufacturing costs:
Variable	14
Fixed	4

The differential revenue from the acceptance of the offer is

a.$609,400

b.$83,100

c.$526,300

d.$1,135,700

Magpie Corporation uses the total cost method of product pricing. Below is cost information for the production and sale of 60,800 units of its sole product. Magpie desires a profit equal to a 21% return on invested assets of $626,000.

Fixed factory overhead cost	$36,500
Fixed selling and administrative costs	7,400
Variable direct materials cost per unit	4.98
Variable direct labor cost per unit	1.88
Variable factory overhead cost per unit	1.13
Variable selling and administrative cost per unit	4.50

The markup percentage on total cost for Magpie's product is

a.16.4%

b.13.1%

c.21.3%

d.27.8%