The procurement division of Sea Monkeys Inc, purchases and processes salt, water conditioner, and brine shrimp eggs, and packages the correct quantities for sea monkeys into a plain silver packet. The finishing division of Sea Monkeys Inc takes plain silver packets with the mix for sea monkeys – purchased from the procurement division and/or an external supplier – and adds an additional layer of packaging with the company’s branding and instructions for customers, and prepares them for shipment. Both divisions are fully autonomous and seek to maximize their own profit.

The procurement division produces and sells 600,000 sea monkey packets per year, its maximum capacity (this is the capacity used for determining the predetermined overhead rate). The per unit costs associated with one silver packet are as follows:

Direct materials $2.50

Direct labor $1.00

Variable factory overhead $0.50

Fixed factory overhead $0.75

Total $4.75

What is the range of transfer prices such that the procurement and finishing divisions should be mutually willing to transact for the 600,000 packets?