oducts 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:
23-28 (similar to) Question Help Cran Sweet 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 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 Cran Sweet's operating income from harvesting 500,000 pounds of cranberries during June 2020 and processing them into juice. Revenues 537500 Costs Harvesting divison Variable costs 60000 Data Table - X Fixed costs 100000 Total harvesting division costs 160000 Processing divsion A B C D Variable costs 62500 Harvesting Division Processing Division Fixed costs 92500 2 Variable cost per pound of cranberries $ 0.12 Variable processing cost per gallon of juice produced $ 0.25 Total processing division costs 195000 3 Fixed cost per pound of cranberries $ 0.20 Fixed cost per gallon of juice produced 0.37 655000 4 2.15 Total costs Selling price per pound of cranberries in outside market | $ 0.68 Selling price per gallon of juice Operating income (315000) Print DoneCran Sweet 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 Cran Sweet's operating income from harvesting 500,000 pounds of cranberries during June 2020 and processing them into juice. Revenues 537500 i Requirements - X Costs Harvesting divison Variable costs 60000 i Data Table - X 1. Compute Cran Sweet's operating income from harvesting 500,000 pounds of Fixed costs 100000 cranberries during June 2020 and processing them into juice. Total harvesting division costs 160000 2. Cran Sweet rewards its division managers with a bonus equal to 3% of operating income. Compute the bonus earned by each division manager in Processing divsion June 2020 for each of the following transfer-pricing methods: D Variable costs 62500 Ha a. 175% of full cost Fixed costs 92500 2 Variable cost per po b. Market price duced $ 0.25 3. Which transfer-pricing method will each division manager prefer? How might Total processing division costs 495000 3 Fixed cost per pound Cran Sweet resolve any conflicts that may arise on the issue of transfer $ 0.37 655000 4 Selling price per pou pricing? $ 2.15 Total costs Operating income (315000) Print Done
