Requirement $2.$ Borges feels that a dual$$ transfer$-$pricing policy will improve goal congruence. He suggests that transfers out of the harvesting division be made at $175\%$ of full cost and transfers into the processing division be made at market price. Compute the operating income of each division under the dual$$ transfer$-$pricing method when $400$ comma $000$ pounds of cranberries are harvested during June $2020$ and processed into juice$\mathrm{.}175\%$ of

Full costs Market price

Harvesting division:

Revenues $$280,000$ $$232,000$

Costs

Division variable costs $60,00060,000$

Division fixed costs $100,000100,000$

Total division costs $160,000160,000$

Division operating income $$120,000$ $$72,000$

Division manager's bonus $$7,200$ $$4,320$