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Got2go is a beverage company that has three production divisions: cold-pressed juices, mineral water, and glassware. The Glassware division manufactures a variety of creatively designed

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Got2go is a beverage company that has three production divisions: cold-pressed juices, mineral water, and glassware. The Glassware division manufactures a variety of creatively designed bottles that are either sold externally to upmarket juice bottlers or internally to the Mineral Water division. Sales and cost data for a case of 24 basic 500ml bottles are as follows: Unit selling price $3.00 Unit variable cost $1.30 Unit product fixed cost $0.80 Practical capacity in cases 500,000 For the coming year, the Glassware division expects to sell 400,000 cases of this bottle. The Mineral Water division currently plans to buy 100,000 cases from the outside market for $3. Cathy McGraw, manager of the Glassware division, approached Colin Thomas, manager of the Mineral Water division, and offered to sell the 100,000 cases for $2.94 each. Cathy explained to Colin that she can avoid selling costs of $0.12 per case by selling internally and that she would split the savings by offering the $0.06 discount on the usual price. Required: (4 marks) (a) What is the maximum transfer price that the Mineral Water division would be willing to pay? (b) What is the minimum transfer price that the Glassware division would be willing to accept? (c) What would be the benefit (or loss) to the firm if the internal transfer takes place? (d) Should an internal transfer take place

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