Enterprises runs a chain of drive-in ice cream stands in Almont during the summer season. Managers of all stands are told to act as if they owned the stand and are judged on their profit performance. Sable Enterprises has rented an ice cream machine for the summer for $3,800 to supply its stands with ice cream. Sable is not allowed to sell ice cream to other dealers because it cannot obtain a dairy license. The manager of the ice cream machine charges the stands $ 7 per gallon. Operating figures for the machine for the summer are as follows: Sales to the stands (16,500 gallons at $7) $115,500 Variable costs, at $2.10 per gallon $34,650 Fixed costs Rental of machine 3,800 Other fixed costs 15,000 53,450 Operating margin $62,050 The manager of the Alden Drive-In, one of the Sable drive-ins, is seeking permission to sign a contract to buy ice cream from an outside supplier at $6.55 a gallon. The Alden Drive-In uses 4,900 gallons of ice cream during the summer. Ember Cabot, controller of Sable, refers this request to you. You determine that the other fixed costs of operating the machine will decrease by $1,300 if the Alden Drive-In purchases from an outside supplier. Requirement 1.Cabot wants an analysis of the request in terms of overall company objectives and an explanation of your conclusion. What is the appropriate transfer price?