Please use the following information to answer questions 35 36. The Kelly Division of Zimmer Company sells all of its output to the Finishing Division of the company. The only product of the Kelly Division is chair legs that are used by the Finishing Division. Kelly Division is currently operating at capacity. There is an open market for the chair legs at a price of $20 per leg. Each chair completed by the Finishing Division requires 4 legs. Production quantity and cost data for 2001 are as follows:

Chair legs (units) 30,000

Direct materials $135,000

Direct labor $90,000

Factory overhead (25% variable) $90,000

Variable selling costs (if sold to outside customers) $1.50 per leg

35. What is the maximum price Finishing is willing to pay?

a.$30

b.$21.50

c.$20

d.$18.50

36. What is the minimum price Kelly is willing to accept?

a.$30

b.$21.50

c.$20

d.$18.50