DeMarcus Engineering Inc. manufactures microchips for general purpose use. These microchips are used in many appliances. Despite having many competitors, DeMarcus's microchips are considered one of the best and are in high demand, consequently, DeMarcus is able to sell all the microchips that it produces. The variable cost of production for a microchip is $5, allocated fixed cost is $5 and it is sold in the market for $20.The cost of production for a microchip is $10 and it is sold in the market for $20. DeMarcus also has another division that produces digital watches using microchips. The watch division wants to use DeMarcus microchips in the digital watches. What do you think is an appropriate transfer price of the microchip?

a,)$20 is an appropriate transfer price for microchip

b.)$15 is an appropriate transfer price for microchip

c.)Chip division should not be a profit center

d.)$10 is an appropriate transfer price for microchip