Wenty Company's Rope Division produces rope. One-third of the Rope Division's output is sold to the Hotspot Products Division of Wenty; the remainder is sold to outside customers. The Rope Division's estimated sales and cost data for the fiscal year ending 30 September are as follows:

Hotspot Products Outsiders Sales Sales $20 000 $45 000 Variable costs 15 000 25 000 Fixed costs 2 000 6 000 Gross margin $ 22 000 $34 000 Unit sales 30 000 50 000