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Ajax Corporation has two divisions. The mining division makes toldine, which is then...

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Accounting

Ajax Corporation has two divisions. The 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 :
a 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.
Q27: Operating income for the Mining Division under the Market Price method is:
$1,400,000
$2,000,000
$800,000
$3,200,000
$200,000
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