Brimstone Co. has 2 division: Cater division and Pillar division. Cater produce material which is used by Pillar division. Normal capacity of Cater division is 200.000 units, and in this time Cater division can produce and sell to outside customer: 185.000 units with selling price $ 60.000. Manufacturing cost per unit consist of:

• Direct Material : $ 11.000
• Direct Labor : $ 15.000
• Variable FOH : $ 6.000
• Fixed FOH : $ 10.000

Fixed selling and administration expense are $ 68.000.000/year and variable selling and administration expense is $ 6.000/unit.

Pillar has a plan to buy material from Cater division: 20.000 unit. During this time Pillar division bought from outside at a price $ 58.000. If Cater division sell to Pillar division, shipping costs can be reduced by $ 2.000/unit.

Required

1. Calculate the minimum and maximum transfer prices.
2. Assumed that the transfer price $ 52.000 agreed on between the two divisions, calculate residual income of Cater division if Cater division sold 20.000 units internally and 180.000 units to outside customer. (Assumption: Average operating asset is $ 15.800.000, minimum rate of return is 12%, and tax rate is 20%).

Note: Please answer using Microsoft Excel, so that I can understand each step of the answering process. Thanks in advance