QUESTION 4

1. Division A of Huskie, Inc. has operating data as follows:

   Capacity	20,000 units
   Selling price	$80 per unit
   Variable costs	$35 per unit
   Fixed costs	$20 per unit

   Division B wants to purchase units from Division A. If Division A agrees to sell units to Division B, A's variable costs will be $5 less per unit. If Division A has capacity available to meet B's requirements, what is the minimum price it should charge?

   	A.	$30
   	B.	$75
   	C.	$40
   	D.	$60