CMO Sdn. Bhd. is a group of companies that manufacture chemicals for industrial use. One of its subsidiaries, Timah Sdn. Bhd. (Timah) manufactures Chemical Y and sells it externally as well as to another company within the same group Pus Sdn. Bhd (Pus). Chemical Y is one of the chemicals that Pus uses to manufacture Chemical Y2K which is sold to external customers. 1 litre of Chemical Y2K uses 0.5 litre of Chemical Y. Pus sells Chemical Y2K for RM1,500 per litre. The variable production costs (excluding Chemical Y costs) per litre of Chemical Y2K incurred by Pus is RM900