Darselect Strawberry manufactures bottles in its glass Division A, which are then transferred to its packaging Division B. In the upcoming month, 310,000 bottles will be transferred to Division B from Division A, where they are filled and then sold at $6.80 per bottle. The bottles can be sold from Division A to other bottlers at $5.00 per bottle. The costs provided relate to total manufacturing budgeted costs for the 310,000 bottles. (Click the icon to view the costs data.) The operating income for Division A and Division B under the market price transfer-pricing method are provided in the accompanying tables. (Click the icon to view the division operating income.) The manager of Darselect Strawberry has just come back from a transfer-pricing conference where he learned about new methods. Re- X Costs data Division A Division B Total variable costs $ 89,900 $ 80,600 Total fixed costs 250,000 164,300 339,900 $ 244,900 Total costs- X Division operating income Division B Revenue $ 2,108,000 Transferred-in costs (1,550,000) Variable costs (80,600) Fixed costs (164,300) $ 313,100 Division operating income Division A Revenue $ 1,550,000 Variable costs (89,900) Fixed costs (250,000) $ Division operating income 1,210,100Requirement 1. Calculate the operating income for Division A using 106% of manufacturing cost as the transfer price. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for a negative operating income.) Division A Revenue Variable costs Fixed costs Division operating income Requirement 2. Calculate the operating income for Division A using 106% of market value cost as the transfer price. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for a negative operating income.) Division A Revenue Variable costs Fixed costs Division operating income Requirement 3. If bonuses are calculated at 6% of operating income, what method will the manager of Division A prefer (106% of market value or 106% of manufacturing cost)? The manager of Division A would prefer the 106% of method because the division operating income would be with this method. Requirement 4. Comment on the 106% of manufacturing costs compared to the $5.00 market value transfer price. What impacts on behaviours or attitudes might occur within divisions if the company switches from market value to 106% of manufacturing cost? The 106% of manufacturing cost transfer price is the $5.00 market value transfer price under the market value method. Division B could see a in morale due to a operating income or emphasis on minimizing costs and improving revenues as the division would look due to changing to the market value method. The might happen with Division A if the market value method is used. Division A may decide to