8-17

Calculate the operating profits for the Mining and Metals Divisions for the 400000 units of toi dim transferred under each of the following transfer-pricing methods: (a) market price, and (b) 110% of full manufacturing costs. suppose seculars rewards each division manager with a bonus, calculated as l%of divisional operating profit (if positive). What is the amount of bonus that will paid to jch division manager under each of the transfer-pricing methods in requirement 1? huh transfer-pricing method will each division manager prefer to use? hat arguments would Arturo Tauzin, manager of the Mining Division, make to support transfer-pricing method that he prefers