Bpp 2016 2017 performance measurement and control CBE style Q 240

Hi Dear Tutor, I have a question.

A company has two divisions, A and B. Division A manufactures a component which is transferred to Division B. Division B uses two units of the component from DIVISION A in every item of finished product that it makes and sells. The transfer price is 43$ per unit of the component

Selling price of finished product made in Division B—154$
Variable cost excluding TPC——————————–32
Variable selling costs chargeable to the division—1$

Fixed costs—–160000$
External sales-7000

Dear Tutor, here Division B sells 7000 and calculate VC bu multuplying with 7000 and TPC with 14000?this is because External demand?if external demand was 14000 units then external sales woudl be 14000*154 not 7000?did i get it right?The division B might buy 14000 units from the division A and it only sold 7000 therefore we take only 7000.

Another question if the Division B buys all units from Division A why then we multiply 7000 with variable cost (33$ )of Division B?In Fact the division B does not produce it only TPC of 43$ should be taken into consideration.

Need expplanation

thanks in advance