Maine Products Ltd has two divisionsChocolate and Mint. The Chocolate division typically sells its chocolate to the Mint division for P3 per gram, which covers variable costs. The Chocolate division also sells to outside customers for P5 per gram. Use the general transfer pricing rule to address the following requirements:

a) Calculate the optimal transfer price assuming the Chocolate division is below capacity. (5 marks )

b) Calculate the optimal transfer price assuming the Chocolate division is at capacity. (5 marks)