Please explain the answer and state what should be the numerical answer for this question.

Barrister Company has two divisions: A and Z. The A Division produces a single product that can be sold to outside customers or to the Z Division. Sales forecasts, production statistics and costs for both divisions for 2014 are shown below: A Division: Outside customer demand Z Division demand Market price per unit Variable manufacturing cost per unit Variable selling costs per unit Fixed manufacturing costs Annual capacity 50 000 units 35 000 units $10 $6 $1 $120 000 80 000 units Z Division: Customer demanod Market price per unit Variable manufacturing cost per unit (not including any transfer from A) Variable selling costs per unit Fixed manufacturing costs Annual capacity 35 000 units $50 $20 S5 $350 000 35 000 units When A Division sells to Z Division, no variable selling costs are incurred by A Division. Calculate the minimum per unit transfer price that A Division should charge Z Division in 2014, using the general transfer-pricing formula. A. $6.00 B. $8.50 C. $7.26 D. None of the given answers