Pure Grow Inc., based in Des Moines, Iowa, sells high-end fertilizers. Pure Grow has two divisions: North Italy mining division, which mines potash in northern Italy U.S. processing division, which uses potash in manufacturing top-grade fertilizer The processing division's yield is 50%: It takes 2 tons of raw potash to produce 1 ton of top-grade fertilizer. Although all of the mining division's output of 15,000 tons of potash is sent for processing in the United States, there is also an active market for potash in Italy. The foreign exchange rate is 0.80 Euro = $1 U.S. The following information is known about the two divisions: Requirement 1. Compute the annual pretax operating income, in U.S. dollars, of each division under the following transfer-pricing methods: (a) 150% of full cost and (b) market price. Begin by computing the operating income for the North Italy mining division under each method, then calculate the operating income for the U.S. processing division under each method. (Enter all amounts in U.S. dollars.) 150% of Full Cost Market Price North Italy Mining division Data table Division revenue Cost: Division variable cost Division fixed cost Total division cost Division operating income A North Italy Mining Division 2 Variable cost per ton of raw potash 3 Fixed cost per ton of raw potash 64 EURO 112 EURO 4 Market price per ton of raw potash 304 EURO 5 Tax rate 6 30% B U.S. Processing Division 7 Variable cost per ton of fertilizer 8 Fixed cost per ton of fertilizer 9 Market price per ton of fertilizer 10 Tax rate $44 U.S. dollars $126 U.S. dollars $1,150 U.S. dollars 35%