Division A produces a component for Hielkema Company's main product automobiles. The division operates as a profit centre. It also sells to outsiders. The present selling price is $75 per component. The company buys 600,000 units of a similar component per year from outside sources. The external purchase price is $73 as a result of a quantity discount. Division A has adequate capacity to supply the needs of the Assembly division. The following data are for

Division A:

Direct material$30 per unit

Direct labour$25 per unit

Variable overhead$10 per unit

Fixed overhead (based on a capacity of 5,000 units)$6 per unit

The minimum price at which A would sell components internally is:

Select one:

a. $71

b. $73

c. $75

d. $65