Basu Spirits and bottles, manufactures bottles and brews fine India Pale Ale. The company consists of two divisions; the bottle division and the brewing division. Currently, the bottle division is operating at full capacity and selling all the bottles they can produce to outside breweries at a price of $1.90 per case. The bottle division's variable cost is $1.45 per case. The brewing division is currently buying bottles from an outside suppler at $1.80 per case and has asked corporate management to require the Bottle division to sell 100,000 cases of bottles needed by the brewing division internally at $1.75 per case. Summary financial information related to the two divisions with all the bottles sold externally are as follows:

Bottle Division Brewing Division

Sales $800,000 $3,000,000

Variable Cost $625,000 $1,500,000

Fixed Cost $74,500 $1,000,000

Income $100,000 $500,000

What is the minimum Transfer price per case?

A- $1.45

B- $1.75

C- $1.80

D- $1.90

E- $2.10

What is the maximum transfer price?

A- $1.45

B- $1.75

C- $1.80

D- $1.90

E- $2.10

What is the impact on company profitability if the bottle division is required to sell the bottles internally?

a- company profit decreases by $5,000

b- company profit decreases by $10,000

c- company profit decreases by $15,000

d- company profit increases by $5,000

e- company profit increases by $10,000