Stibbins Products, Incorporated, has a Receiver Division that manufactures and sells a

number of products, including a standard receiver. Data concerning that receiver appear

below:

The company has an Industrial Products Division that could use this receiver in one of its

products. The Industrial Products Division is currently purchasing $6,000$ of these receivers

per year from an overseas supplier at a cost of $$79$ per receiver.

Required:

a$.$ Assume that the Receiver Division is selling all of the receivers it can produce to outside

customers. What is the acceptable range, if any, for the transfer price between the two

divisions?

b$.$ Assume again that the Receiver Division is selling all of the receivers it can produce to

outside customers. Also assume that $$13$ in variable expenses can be avoided on transfers

within the company due to reduced shipping and selling costs. What is the acceptable

range, if any, for the transfer price between the two divisions?