Brother Company has two divisions, Computer Services and Business Analytics Services. In addition to the external customers, each division also works for the other. The external fees earned by each division in 20X8 were $250,000 for Computer Services and $360,000 for Business Analytics Services. Computer Services worked 3,000 hours for Business Analytics Services, who, in turn, Business Analytics Services worked 1,600 hours for Computer Services. The total costs of external services performed by Computer Services were $110,000 and $240,000 by Consultancy Services.

A)Determine the operating income for each division and for the company as a whole in the table below, if the transfer price from Computer Services to Business Analytics Services is $10 per hour and the transfer price from Business Analytics Services to Computer Services is $15 per hour.

B) Determine the operating income for each division and for the company as a whole if the transfer price between divisions is the mean of two transfer prices in question a).

C) What are the operating income results for each division and for the company as a whole if no internal transfer, and, Computer Services division purchases external Business Analytics services of 1,600 hours at $12.5 per hour while the Business Analytics division purchases Computer Services of 3,000 hours at $9 per hour?

D) If you are

1) Computer Services division manager,

2) Business Analytics division manager, and

3) the companys CEO, how do you prefer the transfer/purchasing procedure in question a), b) and c)