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The Milk Chocolate Division of Mmmm Foods, Inc. had the following operating results last year: Sales (150,000 pounds of chocolate).. Variable expenses. Contribution margin Fixed
The Milk Chocolate Division of Mmmm Foods, Inc. had the following operating results last year: Sales (150,000 pounds of chocolate).. Variable expenses. Contribution margin Fixed expenses. Profit $60,000 37,500 22,500 12,000 $10,500 Milk Chocolate expects identical operating results this year. The Milk Chocolate Division has the ability to produce and sell 200,000 pounds of chocolate annually. Assume that the Peanut Butter Division of Mmmm Foods wants to purchase an additional 20,000 pounds of chocolate from the Milk Chocolate Division. Milk Chocolate will be able to increase its profit by accepting any transfer price above: Select one: a. $0.40 per pound b. $0.08 per pound c. $0.15 per pound d. $0.25 per pound
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