A company has two divisions: Division X and Division Y. Both divisions are profit centres. Division X can produce up to 111170 kilograms of plastic per year. Division Y needs 43972 kilograms of plastic in order to manufacture different products. The market price is $5.15 per kilogram of plastic. The following costs pertain to Division X:

Variable manufacturing costs per kilogram

$3.16

Fixed manufacturing costs per kilogram

6.75

What is the maximum transfer price that Division Y would be willing to pay for the 43972 kilograms bought from Division X if Division X expects to be operating at full capacity this year?

Select one:

a.$3.16

b.$5.15

c.$9.91

d.$6.75