Question 4 (5 marks) String Co.'s Lighting division produces a small light bulb used by other companies as a key part in its products. Cost and sales information relating to the light bulb are as follows: Selling price per unit $15 $ 3 Variable costs per unit Fixed costs per unit $ 7 *Based on the Lighting division's capacity of 120,000 light bulbs per year. String Co.'s Electronics division is introducing a new product that will use a light bulb such as the one produced in the Lighting division. An outside supplier has quoted the Electronics division a price of $14 per light bulb. The Electronics division would like to purchase the light bulbs from the Lighting division instead, if an acceptable transfer price can be worked out. The Electronics division requires 25,000 light bulbs per year, and the Lighting division is presently selling 110,000 light bulbs per year to outside customers. Required: a) Calculate the maximum and minimum transfer price that the Lighting division should charge for one light bulb. (2 marks) b) Assume that the managers of String Co.'s two divisions agree on a transfer price of $13.25 per light bulb. Calculate the net benefit to each division of making this transfer. (3 marks)