Division a of Sibley, Inc Division B Wants to Purchase Units from Division A

Multiple Choice

Division A of Sibley, Inc. has operating data as follows: $$\begin{array} { l l } \text { Capacity } & 20,000 \text { units } \\\text { Selling price } & \$ 80 \text { per unit } \\\text { Variable costs } & \$ 45 \text { per unit } \\\text { Fixed costs } & \$ 20 \text { per unit }\end{array}$$ 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 is operating at capacity, what is the minimum price it should charge?

A) $40
B) $75
C) $20
D) $60