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Please solve the processing division of requirement 2 and show your work Crango Products is a cranberry cooperative that operates two divisions, a harvesting division
Please solve the processing division of requirement 2 and show your work
Crango 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 beve (Click to view the division data.) Read the requirements. Requirement 1. Compute Crango's operating income from harvesting 420,000 pounds of cranberries during June 2017 and processing them into juice. Revenues $ 516,600 Costs Harvesting divison Variable costs $ 33,600 100,800 Fixed costs 134,400 Total harvesting division costs Processing divsion Variable costs 73,500 Fixed costs 77,700 Total processing division costs 151,200 Total costs 285,600 $ 231,000 Operating income Requirement 2. Crango rewards its division managers with a bonus equal to 5% of operating income. Compute the bonus earned by each division manager in 2017 for each transfer pricing method, (a) 175% of full cost and (b) market price. (R 175% of Full costs Market price Harvesting division: Revenues $ 235,200 $ 289,800 Data Table Costs Division variable costs 33,600 33,600 100,800 Division fixed costs 100,800 134,400 Total division costs 134,400 Harvesting Division Variable cost per pound of cranberries Fixed cost per pound of cranberries Selling price per pound of cranberries in outside market Processing Division $ 0.08 Variable processing cost per gallon of juice produced $ 0.35 $ 0.24 Fixed cost per gallon of juice produced $ 0.37 $ 0.69 Selling price per gallon of juice $ 2.46 $ 100,800 155,400 Division operating income $ 5,040 $ 7,770 Division manager's bonus Processing division: Print Done Revenues $ 516,600 Costs 235,200 289,800 Transferred-in costs Division variable costs 73,500 73,500 77,700 77,700 Division fixed costs Total division costs 386,400 441,000 25200 $ 75,600 Division operating income Division manager's bonus 1260 $ 3,780Step by Step Solution
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