Part I
If West Coast Plantations has some idle capacity (500 crates) and must sacrifice other customer orders (500 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 $17.50.
Part III
The highest acceptable transfer price, as determined by the buyer, is $20. Therefore, the range of acceptable transfer prices is $17.50 to $20.00.