Bedtime Bedding Ltd. manufactures pillows. The Cover Division makes covers, and the Assembly Division makes the finished products. The covers can be sold separately for $5.00. The pillows sell for $6.00. The information related to manufacturing for the most recent year is as follows:

Cover Division manufacturing costs $6,000,000

External sales of covers by Cover Division. $4,000,000

Market value of covers transferred to Assembly. $6,000,000

Sales of pillows by Assembly Division $7,200,000

Additional manufacturing of Assembly Division $1,500,000

Required: Compute the operating income for each division and the company as a whole. Use market value as the transfer price. Are all managers happy with this concept? Explain.