a. Using a transfer price based on total manufacturing costs prepare Operating Income Statements for each Division: Assembly and Finishing.

b. Using an external market-based transfer price prepare Operating Income Statements for each Division: Assembly and Finishing.

c. If you are the manager of the Assembly division, which transfer price method do you prefer? Why do you prefer this method?

***PLEASE HELP WITH THIS PROBLEM. CAN YOU SHOW YOUR WORK SO I CAN UNDERSTAND ANSWER. THANK YOU

23. (8 points) Galaxy Corp manufactures high end telescopes and has two divisions: Assembly and Finishing. The Assembly division manufactures lenses that can be sold externally immediately after assembly for $900 or can be process further in the Finishing Division. After work is completed in the Finishing Division, the Finished Telescopes sell externally for $1,200 per unit. Financial results from the most recent period are as follows: Variable manufacturing costs Fixed manufacturing costs External sales price Assembly Division $ 650 $ 50 $ 900 Finishing Division $ 200 $ 50 $ 1,200