Nogo Motors, Inc., has several divisions that often purchase component parts from each other. The company is fully decentralized and each divisions on where to buy and sell in conformity with divisional goals. Igo Division purchases most of its airbags from Letgo Division. The managers of these two divisions are currently negotiation a transfer price for the airbags for next year, when the airbag will be standard equipment on all Igo vehicles. Letgo Division prepared the following financial information for negotiating purposes:

Cost of airbag as manufactured by Letgo: Direct materials costs P 40 Direct manufacturing labor costs 55 Variable manufacturing overhead costs 10 Fixed manufacturing overhead costs 25 Variable marketing costs 5 Fixed marketing costs 15 Fixed administrative costs 10 Total costs P 160