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Division B has asked Division A of the same company to supply it with 5,500 units of part SemiCon this year to use in one of its products. Division B has received a bid from an outside supplier for the parts at a price of Rs.17.00 per unit. Division A has the capacity to produce 30,000 units of part SemiCon per year. Division A expects to sell 27,000 units of part SemiCon to outside customers this year at a price of Rs.18.00 per unit. To fill the order from Division B, Division A would have to cut back its sales to outside customers. Division A produces part SemiCon at a variable cost of Rs.9.00 per unit. The cost of packing and shipping the parts for outside customers is Rs.1.00 per unit. These packing and shipping costs would not have to be incurred on sales of the parts to Division B.
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