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Ajax Corporation has two divisions. I he mining division makes toldine, which...

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Accounting

Ajax Corporation has two divisions. I he mining division makes toldine, which is then transterred to
the metals division. The toldine is further processed by the metals division and is sold to customers
at a price of $160 per unit. The mining division is currently required by Ajax to transfer its total
yearly output of 100,000 units of toldine to the metals division at 110% of full manufacturing cost.
Unlimited quantities of toldine can be purchased and sold on the outside market at $100 per unit.
The following table gives the manufacturing cost per unit in the mining and metals divisions for
2020 :
Manufacturing overhead costs in the mining division are 65% fixed and 35% variable.
b Manufacturing overhead costs in the metals division are 60% fixed and 40% variable.
Q23: The transfer price based on 110% of Full Manufacturing Cost is:
$80
$58
$88
$75.90
$59.40
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