Square Yard Products Inc.'s total operating income will increase by

A) $32,000
B) $112,000
C) $80,000
D) $150,000

Transfer Price

The price at which goods or services are transferred between departments or subsidiaries within the same company, used for accounting and tax purposes.

Operating Income

Earnings before interest and taxes (EBIT), calculated as gross income minus operating expenses.

Variable Cost

A variable cost varies directly with the level of production or sales volume, such as materials and labor costs.