Cranfuel Products is a cranberry cooperative that operates two divisions, a harvesting division and a processing division. Currently, 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 per 1,000 pounds of cranberries. Cost and market price data for the two divisions are as follows: F: (Click to view the division data.) Read the requirements. Requirement 1. Compute Cranfuel's operating income from harvesting 350,000 pounds of cranberries during June 2017 and processing them into juice. Revenues Costs Data Table Harvesting divison Variable costs Fixed costs Processing Division Total harvesting division costs Processing divsion Harvesting Division Variable cost per pound of cranberries Fixed cost per pound of cranberries Selling price per pound of cranberries outside market $ 0.06 Variable processing cost per gallon of juice produced $ 0.35 $ 0.26 Fixed cost per gallon of juice produced $ 0.40 $ 0.58 Selling price per gallon of juice $ 2.05 Variable costs Fixed costs Print Done Total processing division costs Total costs Operating income Enter any number in the edit fields and then click Check Answer. parts remaining Clear All Check Answer P22-28 (similar to) A Question Help Cranfuel Products is a cranberry cooperative that operates two divisions, a harvesting division and a processing division. Currently, all of harvesting's output is converted into cranberry juice by the processing division, and the juice is sold to beverage companies that produce cranberry juice blends. The processing division has a yield of 500 gallons of juice per 1,000 pounds of cranberries. Cost and market price data for the two divisions are as follows: E: (Click to view the division data.) Read the requirements. Requirement 1. Compute Cranfuel's operating income from harvesting 350,000 pounds of cranberries during June 2017 and processing them into juice. Revenues Costs Harvesting divison Requirements Variable costs Fixed costs Total harvesting division costs Processing divsion Variable costs 1. Compute Cranfuel's operating income from harvesting 350,000 pounds of cranberries during June 2017 and processing them into juice. 2. Cranfuel rewards its division managers with a bonus equal to 7% of operating income. Compute the bonus earned by each division manager in June 2017 for each of the following transfer pricing methods: a. 200% 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? Fixed costs Total processing division costs Total costs Operating income Print Done Enter any number in the edit fields and then click Check
