Requirement 1. Calculate the operating incomes for the mining and metals divisions for the 255,000 units of toldine transferred under the following transfer-pricing methods: (a) market price and (b) 110% of full manufacturing cost. Begin with calculating the operating income for the mining division under each method by entering the appropriate amounts, and then complete the table for the metal division. Method A Method B Mining division Division revenue Cost: Division variable cost Division fixed cost Total division cost Division operating incomeMetal division Division revenue Cost: Transferred-in cost Division variable cost Division fixed cost Total division cost Division operating incomeRequirement 2. Suppose Alava revvards each division manager with a bonus. caicuiated as 2% of division operating income [if positive]. Wat is the amount of bonus that will he paid to each division manager under the transferpricing methods in requirement 1'? Which transferpricing method will each division manager prefer to use? The mining division manager vvouid prefer Ij because 1.Ivith this method he earns a bonus of 5D rather than 5D under The metals division manager would prefer because under this method he earns a bonus of 5D rather than 5D under Requirement 3. What arguments would Brett Jones, manager of the mining division, make to support the transferpricing method that he prefers? Which two arguments could Brett Jones use to support the transfer-pricing method that he prefers? {Select all that apply-i I:I A. Allow the two divisions to negotiate the transfer price between themselves everv accounting period, and then the division managers will continue to make decisions to benet the company. I:I B. Setting transfer prices based on costwill cause Jones to pay no attention to controlling costs since all costs incurred will be recovered from the metals division at \"iii-i: of full costs. I:I C. Using market prices for transfers in these competitive market conditions leads to goal congmence. Division managers acting in their own best interests make decisions that are also in the best interests of the company as a whole. I:I D. This transfer-price method is the only:r one that will help top management evaluate the performance of individual sub-units