a paint company produces paint and has 2 divisions: consumer and commercial.

each division manager is evaluated based on profit produced by each division. The commercial division sells paint to the consumer division for $20 per gallon to cover variable cost. the commercial division ALSO sells to outside consumers for $25 per gallon.

using the general economic transfer pricing rule, i need to calculate the optimal transfer price assuming the commercial division is below capacity.

using the general economic transfer pricing rule, i need to calculate the optimal transfer price assuming the commercial division is at capacity.

need to show work