Mech Corporation consists of two divisions, East and West. The East makes Goop, a product that can be used in the production of the product that the West division makes and sells. Both divisions are considered profit centers. The following data are available concerning Goop and the two divisions:

	East		West
Average units produced		150,000
Average units sold					150,000
Variable manufacturing cost per unit	$	2
Variable finishing cost per unit				$	5
Fixed divisional costs	$	75,000		$	125,000

The East Division can sell all of its output outside the company for $4 per unit. The West Division can buy the Goop from other firms for $4. The West Division sells its product for $12.What is the optimal transfer price in this case?

$7 per unit $2 per unit None of these. $9 per unit $4 per unit