Part I
If West Coast Plantations has no idle capacity and must sacrifice other customer orders (1,000 crates) to meet the demands of Grocery Mart (1,000 crates), then the lowest and highest possible transfer prices will be computed as follows.
Part II
The lowest acceptable transfer price, as determined by the seller, is $25.
Part III
The highest acceptable transfer price, as determined by the buyer, is $20. Therefore, there is no range of acceptable transfer prices. This is a desirable outcome for Grocery Storehouse because it would be illogical to give up sales of $25 to save costs of $20.