LL Tools Commer pnce consistent with that recommended by the general guideline in the chapter so that the remain decision would be desirable for the company as a whole? Click on Tools Co 22-29 Effect of alternative transfer-pricing methods on division operating income. Cranergy Pa and Share to acce additional feature is a cranberry cooperative that operates two divisions, a harvesting division and a processing d Currently, all of harvesting's output is converted into cranberry juice by the processing division, 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: E Home Insen Page Layout Formulas A 1 Harvesting Division 2 Variable cost per pound of cranberries 3 Fixed cost per pound of cranberries 4 Seling price per pound of cranberries in outside market Data Review View B c Processing Division $0.14 Variable processing cost per gallon of juice produced $0.26 Fixed cost per gallon of juice produced $0 58 Selling price per gallon of juice $032 $0.50 $2.15 Required 1. Compute Cranergy's operating income from harvesting 420,000 pounds of cranberries during June 2014 and processing them into juice. 2 Cranergy rewards its division managers with a bonus equal to 3% of operating income. Compute the bonus eamed by each division manager in June 2014 for each of the following transfer pricing methods: a. 150% of full cost u. Market price 3. Which transfer pricing method will each division manager prefer? How might Cranergy resolve any conflicts that may arise on the issue of transfer pricing