Q1:

Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. How much will Division 3's income from operations increase?

a.$32,000

b.$72,000

c.$150,000

d.$50,000

Q2:

Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. How much will Division 6's income from operations increase?

a.$150,000

b.$15,000

c.$8,000

d.$80,000

Q3:

Materials used by Square Yard Products Inc. in producing Division 3's product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6's current sales. How much will Square Yard Products total income from operations increase?

a.$32,000

b.$80,000

c.$150,000

d.$112,000

Q4:

The Bottlebrush Company has income from operations of $250,002, invested assets of $306,000, and sales of $1,315,800. Round answers to one decimal place.

(a) Determine the profit margin. %

(b) Determine investment turnover.

(c) Use the DuPont formula to determined the rate of return on investment. %