If the two divisions were to negotiate the transfer price, what would be the minimum price acceptable to West? The maximum acceptable to East? Your firm has two divisions. West Division manufactures 100,000 bearings per year at a variable cost of $5 per unit, which it transfers to East Division, who uses 10 bearings in each of the 10,000 machines it produces. Each machine costs an additional $250 in variable costs to manufacture, and East Division sells them for $500 per unit. Fixed costs are $300,000 per year for West Division, and

$800,000 per year for East Division. The bearings sold by West Division have a market price of $10 per bearing, but West Division would have to spend $100,000 per year in advertising to sell on the market.