ON DIVISION OPERATING INCOME. Cranfuel 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:

Required

Compute Cranfuel's operating income from harvesting $520,000$ pounds of cranberries during June $2020$ and processing them into juice.

Cranfuel rewards its division managers with a bonus equal to $4\%$ of operating income. Compute the bonus earned by each division manager in June $2020$ for each of the following transfer$-$pricing methods:

a$.175\%$ of full cost

b$.$ Market price

Which transfer$-$pricing method will each division manager prefer? How might Cranfuel resolve any conflicts that may arise on the issue of transfer pricing?