The Wheel Division of Liberty Bicycles manufactures bike wheels and sells them to customers for $$35$ each. Its fixed cost per wheel is

$$5\mathrm{.}20$ and its variable cost is $$12\mathrm{.}95$ per unit. Liberty's upper management asks the Wheel Division to transfer $30,000$ wheels to

another division within the company. Which of the following negotiated transfer prices between the two divisions suggests that the

Wheel Division is operating with adequate excess capacity?

$$18\mathrm{.}15$

$$10\mathrm{.}85$

$$40\mathrm{.}20$

$$7\mathrm{.}75$