Goldwasser Industries has two divisions, the Lauren Division and the Lindsey Division. Information about a component that the Lauren Division produces is as follows:

Revenue

$ 100 per unit

Variable manufacturing costs

$ 25 per unit

Fixed manufacturing overhead

$ 15 per unit

Expected sales in units

7,000 units

The Lauren Division can produce up to 8,000 components per year. The Lindsey Division needs 500 units of the component for a product it manufactures.

Requirement 1: Determine the minimum transfer price that the Lauren Division would accept.