Westgate manufactures HVAC (heating, ventilation, and air conditioning ) 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 costs per furnace are:

Direct materials	$1,300.00
Direct labour	$350.00
Variable overhead	$100.00
Division fixed costs	$90.00

Assembly's costs per completed furnace are:

Direct materials	$25.00
Direct labour	$150.00
Variable overhead	$50.00
Division fixed costs	$40.00

Assume the transfer price for a furnace is 130% of total costs of the Manufacturing Division and 5,000 of the furnaces are produced and transferred to the Assembly Division. The Manufacturing Division's operating income is:

A)	$2,500,000.

B)	$2,760,000.

C)	$1,175,000.

D)	$3,250,000.

E)	$2,625,000.