Assume the information as shown with respect to Imperial Beverages and Pizza Maven (both companies are owned by Harris and Louder).

Imperial Beverages:
Ginger beer production capacity per month	12,000 barrels
Variable cost per barrel of ginger beer	$6 per barrel
Fixed costs per month	$60,000
Selling price of Imperial Beverages ginger beer on the outside market	$18 per barrel
Pizza Maven:
Purchase price of regular brand of ginger beer	$16 per barrel
Monthly consumption of ginger beer	3,000 barrels

Required (show your work for partial credits!):

1) If Imperial Beverages has sufficient idle capacity (5,000 barrels) to satisfy Pizza Mavens demands (3,000 barrels) without sacrificing sales to other customers, what is the range of acceptable transfer price?

2) If Imperial Beverages has some idle capacity (2,000 barrels) and must sacrifice other customer orders (1,000 barrels) to meet Pizza Mavens demands (3,000 barrels), what is the range of acceptable transfer price?