Answer the Following Question(s)using the Information Below

Answer the following question(s) using the information below.Easy Fit Ltd.manufactures heating, ventilation, and air conditioning (HVAC) 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:
Assembly's costs per completed furnace are:

-If the Assembly Division sells 1,000 furnaces at a price of $3,500 per unit to customers, what is the company's operating income?

A) $3,250,000
B) $175,000
C) $1,660,000
D) $3,235,000
E) $1,395,000

Correct Answer:

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