Calgary Lumber has a raw lumber division and a finished lumber division. The variable costs are:

-Raw lumber division: $130 per 100 board-feet of raw lumber

-Finished lumber division: $155 per 100 board-feet of finished lumber

Assume that there is no board-feet loss in processing raw lumber into finished lumber. Raw Lumber can be sold a $255 per 100 board-feet. Finished lumber can be sold at $330 per 100 board-feet.

2. Assume that internal transfers are made at 150% of variable cost. Will each division maximize its division operating-income contribution by adopting the action that is the in the best interest of Calgary Lumber as a whole? Explain.