Dunder Mifflin Corporation operates two divisions: the Harvesting Division and the Processing Division. The Harvesting Division is responsible for producing wood pulp, while the Processing Division further processes the wood pulp to produce paper, which is then sold to other companies. The Harvesting Division has an annual production capacity of 1,800,000 pounds of wood pulp. The Processing Division is currently operating below its full capacity and can process all the wood pulp produced by the Harvesting Division. The Processing Division's production process yields 1,750 reams of paper for every 2,250 pounds of wood pulp. 1. Calculate the annual operating income of Dunder Mifflin assuming that the Harvesting Division is operating in its full capacity and the Processing Division able to further process all the products of Harvesting Division 2. The Dunder Mifflin Corporation board of directors decided to give a bonus to the division managers which is equivalent to 4% of operating income of their division. Calculate the annual bonus received by the manager of both divisions using the transfer pricing method as follows: - 110% at full cost; and - Market Price 3. Which transfer-pricing method will each division manager choose? 4. How much is the maximum and minimum transfer price that can be applied by the company? Why