Bedtime Bedding Company manufactures pillows. The Cover Division makes covers and the Assembly Division makes the finished products. The covers can be sold separately for RM5.00. The pillows sell for RM6.00. The information related to manufacturing for the most recent year is as follows: Cover Division manufacturing costs RM 6,000,000 Sales of covers by Cover Division RM4,000,000 Market value of covers transferred to Assembly RM6,000,000 Sales of pillows by Assembly Division RM7,200,000 Additional manufacturing costs of Assembly Division RM1,500,000

Required: (a) Compute the operating income for each division and the company as a whole. Use market value as the transfer price. (b)Explain whether all managers are satisfied with this concept.