Frocks and Gowns, Inc., has two divisions, Day Wear and Night Wear. The Day Wear Division has an investment base of $820,000 and produces (and sells) 113,000 units of Collars at a market price of $12.90 per unit. Variable costs total $7.30 per unit, and fixed charges are $3.20 per unit (based on a capacity of 133,000 units). The Night Wear Division wants to purchase 28,000 units of Collars from The Day Wear Division. However, the Night Wear Division is only willing to pay $9.00 per unit. What is the minimum transfer price for the 28,000 unit order that the Day Wear Division would accept if it wishes to maintain its pre-order contribution?

$7.30.

$3.20.

$8.90.

$9.70.