I know the answer already but please explain WHY and HOW this is the answer. Why do we not include fixed manufacturing costs? Does it have something to do with having excess capacity?

Flash E-Card Manufacturing manufactures software parts for the computer software systems that produce e-cards. The Flash Il part is currently manufactured in the Computer Department. The Data Department also produces the part and the plant has excess capacity to produce the Flash II part. The current market price of the Flash II part is $700. The managerial accountant reported the following manufacturing costs and variable expense data: Flash E-Card Manufacturing Manufacturing Costs and Variable Expense Report Flash Component Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (current production level) Variable selling expenses (only incurred on sales to outside consumers) $8100 $1601 $1401 $185 $136 If the highest acceptable transfer price is $700 in the market, what is the lowest acceptable in-house price the Data Department should receive to produce the part in-house at the Computer Department? $160 $810 $1,110 $140 [5810 + S160 + $140] = $1,110