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. Cranfuel Products is a cranberry cooperative that operates two divisions, a harvesting division and a processing division. Curently, all of harvesting's output is converted
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Cranfuel Products is a cranberry cooperative that operates two divisions, a harvesting division and a processing division. Curently, all of harvesting's output is converted into cranberry juice by the processing division, and the juice is sold to large beverage companies that produce cranberry juice blends. The processing division has a yield of 500 gallons of juice pet 1,000 pounds of cranberries. Cost and market price data for the fwo divisions are as follows (Click to view the division data) Read the requirements Requirement 1. Compute Cranfuel's operating income from harvesting 520,000 pounds of cranberies dunng dune 2020 and processing them into Data table Requirements 1. Compute Cranfuel's operating income from harvesting 520,000 pounds of cranberries during June 2020 and processing them into juice. 2. Cranfuel rewards its division managers with a bonus equal to 4% of operating income. Compute the bonus earned by each division manager in June 2020 for each of the following transfer-pricing methods: a. 175% of full cost b. Market price 3. Which transfer-pricing method will each division manager prefer? How might Cranfuel resolve any conflicts that may arise on the issue of transfer pricing Step by Step Solution
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