W P22-29 (similar to) Question Help O Crangood 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 company calculated the operating income and the corresponding division managers' bonuses when 460,000 pounds of cranberries are harvested and processed into juice under two different transfer pricing methods: FF(Click to view the operating income and bonus data.) (Click to view additional information.) Read the requirements. Ir a transter pnce OT 200% OT TULI Costs is mandatea and Borges's decentralization policy is adopted the processing DIVISION manager will prefer to buy cranbernes Trom an external supplier. THIS Will lower Crangood's overall operating income creating goal-congruence problem. Requirement 2. Borges feels that a dual transfer pricing policy will improve goal congruence. He suggests that transfers out of the harvesting division b made at 200% of full cost and transfers into the processing division be made at market price. Compute the operating income of each division under the dual transfer pricing method when 460,000 pounds of cranberries are harvested during June 2017 and processed into juice. Begin by computing the harvesting division's operating income, then compute the processing division. Harvesting division: Revenues Casts Division variable costs Division fixed costs Total Division costs Division operating income i Bonus calculations 200% of Full costs Market price Harvesting division: Revenues 331,200 $ 266,800 Costs Division variable costs 36,800 128,800 36,800 128,800 Division fixed costs Total division costs 165,600 165,600 $ 165,600 $ 101,200 Division operating income 11,592 $ 7,084 Division manager's bonus Processing division: Revenues 565,800 $ 565,800 Costs Transferred-in costs 331,200 266,800 Division variable costs 46,000 46,000 Division fixed costs 108,100 108,100 Total division costs 485,300 420,900 $ 80,500 $ 144,900 Division operating income $ 5,635 $ 10,143 Division manager's bonus