under two different transfer pricing methods: (Click the icon to view the operating income and bonus data.) of Cranfuel is free to make its own decisions regarding the purchase of direct materials and the sale of finished products." Requirement 1. Give an example of a goal-congruence problem that will arise if Cranfuel continues to use a transfer price of 225% of full cost and Borges's decentralization policy is adopted. The processing division manager will prefer to buy cranberries which will lower Cranfuel's overall income. market price. Compute the operating income of each division under this when 460,000 kilograms of cranberries are harvested during June and processed into juice. Begin by computing the harvesting division's operating income, and then compute the processing division. (Use a minus sign or parentheses for an operating loss.) The company has already calculated its operating income from harvesting and processing 460,000 kilograms of cranberries. (Click the icon to view the operating income.) A dual transfer-pricing method entails using for transfers into the buying division and transfers out of the supplying division. Requirement 4. Suggest two problems that may arise if Cranfuel implements the dual transfer prices described in requirement 2. It may reduce the incentives of the supplying division to control costs since the costs are transferred out at a higher amount than the actual costs incurred. It does not insulate the harvesting division manager from the frictions and the discipline of the marketplace because costs, not market prices, affect the revenues of the supplying division. A dual transfer-pricing system does not provide clear signals to the individual divisions about the level of decentralization Bonus calculations Operating income calculation