Transfer pricing Mogi Corp. manufactures one primary product, which is processed through two divisions ( P and R). Costs for each division are: * Based on production of 45,000 and 72,000 gallons for P and R respectively. P Division produces 45,000 gallons per month. R Division uses 72,000 gallons per month; of that, 45,000 gallons are purchased internally and 27,000 are purchased externally at $10 per gallon. After processing through R Division, a gallon of final product can be sold for $55. a. What would be P's transfer price to R Division if the price is set at 180 percent of variable cost? \$ b. What would be P's transfer price to R Division if the price is set at 130 percent of full cost? \$ c. What would be P's transfer price to R Division if the price is set at market value? \$ d. What is Mogi Corp.'s operating profit if all 72,000 gallon of final product can be sold for $55 per gallon? \$