Problem 1 (150 points) The Mill Flow Company has two divisions. The Cutting Division prepares lumber at its sawmills. The Assembly Division prepares the cut lumber into finished wood for the furniture industry. No inventories exist in either division at the beginning of 20x8 During the year, the Cutting Division prepared 60,000 cords of lumber at a cost of S660,000. Market price per cord of lumber from outside producer is $12. All the lumber was transferred to the Assembly Division, where additional operating costs of S6 per cord were incurred. The 60,000 cords of finished wood were sold for $2,500,000. Required: Determine the operating income before tax for each division if the transfer price from Cutting division to Assembly division is chosen based on the market price of lumber from outside producer. (50 points) 1. termine the operating income before tax for each division if the transfer price is 150% of full cost. (50 points) 3. If the company has a cutting plant in a country with 40% income tax and an assembly plant in a country with 20% income tax, which transfer price will result in the highest net income for the overall company? (50 points)