Walsdorf Company's information technology department is developing a support department transfer price based on minutes of computer time. For 2010, its expected capacity was 700,000 minutes, and theoretical capacity was 1,000,000 minutes. Costs of the IT department for 2010 were expected to total $665,000.

a. What is the IT transfer price based on expected capacity?

b. What is the IT transfer price based on full capacity?

c. Actual operating costs of the IT department for 2010 were $689,400, and actual capacity usage was 730,000 minutes. What were the total variances from budget if the IT department used a transfer price based on expected capacity? On full capacity? What are some possible causes of that variance?