Division a Produces a Component for Hielkema Company's Main Product

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 price range within which A would sell components to the Assembly Division is:

A) $71 to $73
B) $65 to $73
C) $71 to $75
D) $65 to $75