PA7. LO 9.4 Management of Great Springs Bottled Water Company has asked you, the controller, to develop a transfer pricing system for the oompany. The Transportation Department of the company sells all of its product to the Bottling Department of the company. Thus the Transportation Department's sales become the Bottling Department's cost of goods sold. In order to determine an optimal transfer pricing system, management would like you to demonstrate what an income statement would look like under a cost, market, and negotiated transfer pricing structure. These various transfer prices are listed as follows. Prepare an income statement for each of the transfer prices by filing in the missing numbers in the provided income statenent based on each transfer price (thus four different income statements) and calculate the operating income/loss percentage. Prepare a brief summary of the results. PA1 0.62 $ 0.74 $ 0.70 278,000 Cost-based Market-based $ Gr Ou Negotiated Gallons transferred Tot Lan Wa GREAT SPRINGS BOTTLED WATER Income Statement Month Ending August 31, 2018 Rep Fue Util Transportation Bottling $286,000 Tot Sales Cost of goods sold Gross profit Fuel/utility expense Wages expense Costs allocated from corporate Total expenses Operating income/lloss) $ Operating income/loss) % $89,627 Ope Ope $15,000 43,090 17,236 $75,326 $3,200 57,200 15,000 $75,400 A B