Gracie Corporation includes two divisions, Engine Division and Lawnmower Division. The Engine Division makes i specialized engines, including one that could be used by the Lawnmower Division. Costs for the engine are variable costs, $32; fixed costs, $40. The Engine Division has capacity to make 20,000 of the engines, and it is operating at capacity. It sells the engines to other companies for $104 each. If a sale were made to the Lawnmower Division, variable costs would be reduced by $8 per engine on those units. The Lawnmower Division needs 8,000 engines per year, and it has been purchasing them from another company for $90 each.

Required:

a) If a transfer were to occur between Engine Division and Lawnmower Division, what is the maximum that Lawnmower Division should be willing to pay for the engines?

b) If a transfer were to occur between Engine Division and Lawnmower Division, what is the minimum price that Engine Division should be willing to accept?