Wolf Manufacturing makes a variety of products, including lawn mowers. Wolf's Lawn Mower Division can use a component, K32, manufactured by Wolf's Electrical Division. The market price for K32 is $24 per unit. The variable cost per unit for K32 in the Electrical Division is $11, while the absorption cost per unit is $17. The divisions at Wolf use a negotiated price strategy to set transfer prices between divisions. The Electrical Division has excess capacity. What is the lowest acceptable transfer price to the Electrical Division? What is the highest acceptable transfer price that the Lawn Mower Division would pay? Explain your answer.

_________ is the lowest acceptable transfer price to the Electrical Division.

$ 13, the difference between the variable cost and market price

$ 11, the variable cost

$ 17, the absorption cost

$ 24, the market price

____________ is the highest acceptable transfer price that the Lawn Mower Division would pay.

$ 13, the difference between the variable cost and market price

$ 11, the variable cost

$ 17, the absorption cost

$ 24, the market price