Calgary has two divisions: one that handles the raw materials in the production process, and another...

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Calgary has two divisions: one that handles the raw materials in the production process, and another that handles the finishing of the final product. The variable costs in each division are: Raw material management: $125 per 100 feet of material Finishes: $145 per 100 feet of finishes on the product Assume that there is no deterioration or loss of material in the process. Additionally, production can be sold in the raw material handling stage for $175 per 100 feet of material, and in the completions stage for $345 per 100 feet of completions. 1. Demonstrate whether it is appropriate for Calgary to continue, as a company, in charge of both divisions, and both stages in the process. 2. Assume that internal transfers between the handling division and the completion division are made at 130% of the variable cost. Demonstrate whether each division is maximizing its operating income under this option, and whether there is goal congruence. Explain. 3. Assume that internal transfers between the handling division and the completion division are made at the market price. Demonstrate whether each division is maximizing its operating income under this option, and whether there is goal congruence. Explain. Calgary has two divisions: one that handles the raw materials in the production process, and another that handles the finishing of the final product. The variable costs in each division are: Raw material management: $125 per 100 feet of material Finishes: $145 per 100 feet of finishes on the product Assume that there is no deterioration or loss of material in the process. Additionally, production can be sold in the raw material handling stage for $175 per 100 feet of material, and in the completions stage for $345 per 100 feet of completions. 1. Demonstrate whether it is appropriate for Calgary to continue, as a company, in charge of both divisions, and both stages in the process. 2. Assume that internal transfers between the handling division and the completion division are made at 130% of the variable cost. Demonstrate whether each division is maximizing its operating income under this option, and whether there is goal congruence. Explain. 3. Assume that internal transfers between the handling division and the completion division are made at the market price. Demonstrate whether each division is maximizing its operating income under this option, and whether there is goal congruence. Explain.