1.Alex Ltd, has two divisions, a Parts Division and Marketing Division. Each division operates as a profitThe Parts Division manufactures keyboards and is free to sell its product internally and externally.The Parts Division's annual capacity is 45,000 units and its fixed cost is $720,000.Currently, external sales represent 70% of the Parts Division's production capacity.The selling price for a keyboard is $60, and the variable manufacturingcost is 60% of the selling price.Commissions $ 5 per unit.

Marketing Division is requesting a new specialty Keyboard to be used with a new game.Mr. Roberts, the manager of the Marketing Division, has obtained a quote of $70 from external suppliers.He has asked the Parts Division to provide a quote for 9,000 units. To make the order, the Parts Division needs to invest in a stamping machine, costing $36,000.In addition, the keyboard will incur for new features; however, it will reduce the regular variable cost by $3 of commission cIt takes 2 regular 1 specialty keyboard.The new keyboard can be sold for $90.

Required:

a.Calculate the minimum transfer price for the keyboard order.

b.Establish the range for the transfer price, if any, between the two divisions.

c.Should the Parts Division pursue this opportunity to sell the keyboard internally?