Lorn Inc. has a division that produces paint and another division that manufactures subdivision houses. The paint producing division incurs the following cost for one gallon of paint:

Direct Materials $1.10

Direct Labor 1.45

Variable Overhead 0.90

Fixed Overhead 1.15

Total $4.60

The paint division can make 1,000,000 gallons per year, and is at capacity. The housing manufacturing division currently buys its paint from an outside supplier for $5.20 per gallon (the same price that the paint division receives).

A. The maximum transfer price per gallon of paint is $? This price is set by which of the two divisions?

B. The minimum transfer price per gallon of paint is $? This price is set by which of the two divisions?