Crangood 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: (Click to view the division data.) Read the requirements .... Requirement 1. Compute Crangood's operating income from harvesting 460,000 pounds of cranberries during June 2020 and processing them into juice. Revenues Costs Harvesting divison Variable costs Fixed costs Total harvesting division costs Processing divsion Variable costs Fixed costs Total processing division costs Total costs Operating income Requirement 2. Crangood 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 transfer pricing method, (a) 250% of full cost and (b) market price. (Round the revenue per pound to the nearest cent. Round final answers to the nearest whole dollar) 250% of Full costs Market price Harvesting division: Revenues Costs Division variable costs Division fixed costs Total division costs Division operating income Division manager's bonus Processing division: Revenues Costs Transferred-in costs Division variable costs Division fixed costs Total division costs Division operating income Division manager's bonus Requirement 3. Which transfer-pricing method will each division manager prefer? How might Crangood resolve any conflicts that may arise on the issue of transfer pricing? The harvesting division manager will prefer to transfer at The processing division manager will prefer to transfer at Crangood may resolve or reduce transfer pricing conflicts by: O A. Using dual transfer prices since it does not benefit the company to have the harvesting division control costs since they do not produce the end product OB. Requiring the two divisions to negotiate the transfer price between themselves every accounting period. O C. Basing division managers' bonuses on overall Crangood profits in addition to division operating income. OD. None of the above Data Table B 00 D 1 A Harvesting Division Processing Division 2 Variable cost per pound of cranberries $ 0.12 Variable processing cost per gallon of juice produced 3 Fixed cost per pound of cranberries $ 0.20 Fixed cost per gallon of juice produced 4 Selling price per pound of cranberries in outside market S 0.70 Selling price per gallon of juice $ 0.19 $ 0.45 $ 2.25 Print Done