Cindy Lou, Inc. operates a chain of family restaurants.
Cindy Lou recently accquired a company that can produce the sweatshirts (among other gift products).
Due to the acquisition, the company will now have a Restaurant Division and a Gift Division.
The Restaurant Division sells company-branded sweatshirts in their gift shops for $25.00 each.
They had been purchasing 5,000 sweatshirts per year from an outside supplier for $12.50 each.
The Gift Division currently has a capacity of 30,000 sweatshirts per year.
The Division currently sells 20,000 sweatshirts to outside companies for $12.00 each.
The full cost of each sweatshirt is $9.00, but the variable cost is $7.50 each.
The Restaurant Division will now purchase 5,000 sweatshirts per year from the Gift Division.
The company policy is that all transfer prices are negotiated by the divisions involved.
1)	What is the maximum transfer price? Which division sets it?
2)	What is the minimum transfer price? Which division sets it?
3)	Suppose that the two divisions agree on a transfer price of $10.00.
	What is the benefit for the Restaurant Division?
	For the Gift Division?
	For Cindy Lou, Inc. as a whole?