=+*$1,320 of the $1,560 per unit represents materials costs, and the remaining $240 per unit represents other variable conversion expenses incurred within the Navigational Systems Division.

The Specialized Semiconductors Division is presently producing 640 units out of a total capacity of 800 units. Materials used in producing the Navigational Systems Divisions product are currently purchased from outside suppliers at a price of $1,320 per unit. The Specialized Semiconductors Division is able to produce the components used by the Navigational