Going Places, Incorporated manufactures a variety of luggage for airline passengers. The company has several luggage production divisions, including the Suitable Cases Division and a wholly owned subsidiary, Its Mine, that manufactures small identification tags used on luggage. Each piece of luggage Suitable Cases produces two identification tags for which it previously paid the going market price of $2 each. Financial information for Suitable Cases and Its Mine follows:

	Suitable Cases Division	Its Mine
Sales
4,500 bags $150.00 each	$ 675,000
200,000 tags $2.00 each		$ 400,000
Variable expenses
4,500 bags $85.00 each	382,500
200,000 tags $0.50 each		100,000

Its Mine has a production capacity of 250,000 tags.

Required:

Determine how much Going Places will save on each tag if the Suitable Cases Division obtains them from Its Mine instead of an external supplier.

Determine the maximum and minimum transfer prices for the tags.

Suppose Going Places has set a transfer price policy of variable cost plus 60 percent for all related-party transactions. Next, determine how much each party will benefit from the internal transfer.

Determine the mutually beneficial transfer price.