Mathes Corporation manufactures paper products. The company operates a landfill, which it uses to dispose of nonhazardous trash.

Mathes is considering making the landfill a profit center and charging the manufacturing plants for disposal of the trash. The landfill has sufficient capacity to operate for at least the next 20 years. Other landfills are available in the area (both private and municipal), and each plant would be free to decide which landfill to use.

Required:

a. Compute the optimal transfer price.

b. Compute the total variable costs for a 3-ton load of trash from one of the plants. (Do not round intermediate calculations.)