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Cran Bonofit Products is a cranberry cooperative that oporates fwo divisions, a harvesting division and a processing division. Currently, ali of harvesting's output is corverted
Cran Bonofit Products is a cranberry cooperative that oporates fwo divisions, a harvesting division and a processing division. Currently, ali of harvesting's output is corverted into cranberry juice by the processing division, and the juibe is sold to lasgo beverage comparies that produce cranborry juice biends. The processing division has a yield of 500 galions of juico per 1,000 pounds of cranberries, Cost and market price data for the two divisions aro as follows: (Click to view the division data.) Read the requirements. Data table Requirements 1. Compute Cran Benefit's operating income from harvesting 500,000 pounds of cranberries during June 2020 and processing them into juice. 2. Cran Benefit rewards its division managers with a bonus equal to 7% of operating income. Compute the bonus earned by each division manager in June 2020 for each of the following transfer-pricing methods: a. 150% of full cost b. Market price 3. Which transfer-pricing method will each division manager prefer? How might Cran Benefit resolve any conflicts that may arise on the issue of transfer pricing? Requirement 1. Compute Cran Benefit's operating income from harvesting 500,000 pounds of cranberries during June 2020 and processing them into juice, Revenues Costs Harvosting divison Variable oosts Fowed costs Total harvesting division costs Processing divsion Variable costs Fixed costs Total processing division costs Total costs Oporating income
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