The following information is available for the two divisions of MAC Company:

Division A:
Selling price to outside market	$55
Standard unit-level costs	35
Division B:
Selling price of finished product	$95
Standard unit-level costs	25

Division A routinely sells its product internally to Division B and Division A has no excess production capacity.

a) In order to ensure the best use of the productive capacity of Division A, what transfer price should be set by Division A and what effect does this transfer price have on the overall margin for the company? Is the answer goal congruent under the general rule?

b) Should Division B accept a special order for its product if the selling price is reduced to $70. Use your answer from (a) and explain.

c) Would your answer to (b) change if Division A had excess capacity? Explain.

Please show formulas, thank you!