Division A manufactures screens used in high-definition TVs. It sells its one product, a standard screen, for a price of $210 per screen. Variable costs are $90 per screen, and allocated fixed costs amount to $95 per screen. Division B has asked Division A to supply 5,000 custom-made screens. These custom screens have a variable cost of $105 per unit. Division A believes that its standard screen and the custom screen for Division B consume the same amount of capacity to make. It now has the capacity to make 20,000 screens annually.

Required:

For each of the following scenarios, what is the minimum price per custom screen that

Division A can set for this transfer and maintain its profit at the current level?

a. Division A is currently making 12,000 standard screens.

b. Division A is operating at capacity.

c. Division A is making and selling 16,000 standard screens currently. Division B wants to buy all 5,000 screens from Division A or none at all.