Requirements 1. Calculate the operating incomes for the Mining and Metals divisions for the 250,000 units of Toldine transferred under the following transfer-pricing methods: (a) market price and (b) 120% of full manufacturing cost. 2. Which transfer-pricing method does the manager of the Mining division prefer? What arguments might he make to support this method? Toldine is further processed by the Metals division and is sold to customers at a price of $190 per unit. The Mining division is currently required by True North to transfer its total yearly output of 250,000 units of Toldine to the Metals division at 120% of full manufacturing cost. Unlimited quantities of Toldine can be purchased and sold on the outside market at $95 per unit. Data table Mining Metals Division Division Direct materials cost $ 14 $ 12 Direct manufacturing labor cost 24 29 Variable manufacturing overhead cost 13 15 29 12 Fixed manufacturing overhead cost $ 80 $ 68 Total manufacturing cost per unit Requirement 1. Calculate the operating incomes for the Mining and Metals divisions for the 250,000 units of Toldine transferred under the following transfer-pricing methods: (a) market price and (b) 120% of full manufacturing cost. (a) Begin by calculating the operating income for the mining division using market-based transfer prices. Mining division: Revenues Costs Division variable costs Division fixed costs Total Division costs Division operating income