Hrubec Products, Inc., operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow:

For Requirement 3 through 6 below, assume that the Pulp Division is currently selling only 30,000 tons of pulp each year to outside customers at the stated $70 price.

For Requirement 3 through 6 below, assume that the Pulp Division is currently selling only 30,000 tons of pulp each year to outside customers at the stated $70 price.

Requirement 3:

a) What is the minimum transfer price for Pulp Division?

b)

What is the range of transfer price the manager's of both divisions should agree?

C)	Are the managers of the Carton and Pulp Divisions likely to voluntarily agree to a transfer price for 5,000 tons of pulp next year?