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Crangood 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
Crangood 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 1,800 litres of juice per 1,000 kilograms of cranberries. Cost and market price data for the two divisions are as follows:
X Data table Harvesting Division Processing Division Variable cost per kilogram of cranberries $ 0.1300 Variable processing cost per litre of juice produced 0.18 per litre Fixed cost per kilogram of cranberries $ 0.26 Fixed cost per litre of juice produced 0.45 per litre Selling price per kilogram of cranberries 0.72 Selling price per litre of juice produced $ 2.00 per litre Print DoneRequired . Compute l[Irangcod's operating income from harvesting 420.0111] kilograms of cranbem'es during June and processing them into juice. . Crangood rewards its division managers with a bonus equal to 4% of operating income. Compute the bonus earned by each division manager in June for each of the following transferpricing methods: a. 225% of full cost h. Market price 3-. Which transfer-pricing method will each division manager prefer? How might Crangocd resolve any conicts that may arise on the issue of transfer pricing? Requirement 1. Compute Crangood's operating income from harvesting 420,000 kilograms of cranberries during June and processing them into juice. (Round your answers to the nearest whole dollar. Use a minus sign or parentheses for any operating losses.) H Revenues Costs Harvesting Division Variable costs Fixed costs Total Harvesting Division costs Processing Division Variable costs Fixed costs Total Processing Division costs |:| l;l Total costs |;| ; Operating income {loss}Step by Step Solution
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