ABC Company is a computer products manufacturer with a CPU division that produces both standard and special CPUs. The following data is given:

- Production capacity: 100,000 units

- Variable cost per unit: 16 riyals

- Fixed cost per unit: 9 riyals

- Selling price in the market: 30 riyals

The manager of the Hard desk division wants to buy 10,000 standard CPUs from the CPU division instead of the external supplier who charges 29 riyals per CPU. However, there are some implications:

- If the CPU division transfers 10,000 units to the Hard desk division, it will save 3 riyals per unit in variable costs.

- If the Hard desks division also needs 20,000 special CPUs, which the CPU division can produce at a variable cost of 20 riyals per unit. However, this will reduce the CPU division's capacity to produce only 70,000 standard CPUs. The Hard desks division can buy the standard CPU from an external supplier for 41 riyals per unit.

Discuss this case and give your recommendations:

1. What is the minimum transfer price that the CPU division should accept for the standard CPU?

2. What is the maximum transfer price that the Hard desk division should pay for the CPU?

3. What is the acceptable range of transfer prices that both divisions can agree on for the standard CPU?