transferring division B prica llgl produce the same operating income for that the resulting so A? chapter the 300 units to ls that and division for division A. What transfer price would the with that recommended by the general guideline in decision would be desirable for the company as a whole? 2-29 Effect of alternative transfer methods on division operating income. cranergy Products 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 to large beverage companies that produce cranberry juice blends. The processing division sold cranberries, cost and market price data for the two as a yield of 500 gallons of juice per 1,000 pounds of divisions are as follows: Home Insert Page Layout Formulas Data Review Processing Division Harvesting Division variable processing cost per galon of juice produced iso 32 $0.50 Variable cost per pound of cranberries $0.14 $0.26 Fixed cost per gallon of juice produced Fixed cost per pound of crant $2.15 Selling price per pound of cranbonies in outside market 5058 Selling price per gallon of juice ed 1. Compute cranarays operating income from harvesting 420 000 pounds of cranberries during June 2014 and processing them ato juice. 2. uranergy rewards its division managers with a bonus equal to 3% of operating income. Compute the bonus earned by each division manager in June 2014 fcr each of the following transfer pricing motlhods: a. 150% of full cost b. 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? price DOW