Ayayai Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps.

Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $$10$ from an outside vendor.

Division A needs $8,000$ lamps for the coming year.

Division B has the capacity to manufacture $40,000$ lamps annually. Sales to outside customers are estimated at $32,000$ lamps for the

next year. Reading lamps are sold at $$12$ each. Variable costs are $$7$ per lamp and include $$2$ of variable sales costs that are not

incurred if lamps are sold internally to Division A$.$ The total amount of fixed costs for Division B is $$64,000.$

Consider the following independent situations.

$($a$)$

Your answer is correct.

What should be the minimum transfer price accepted by Division B for the $8,000$ lamps and the maximum transfer price paid by

Division A$?$

Minimum transfer price accepted by Division B $$,$ per unit

Maximum transfer price paid by Division A $$,$ per unit

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$($b$)$

Your answer is partially correct.

Suppose Division B could use the excess capacity to produce and sell externally $12,000$ units of a new product at a unit selling

price of $$7.$ The unit variable cost for this new product is $$5.$ What should be the minimum transfer price accepted by

for the $8,000$ lamps and the maximum transfer price paid by Division $A?$

Minimum transfer price accepted by Division B $$,$ per unit

Maximum transfer price paid by Division A $,]$ per unit

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