A manufacturing company makes a variety of consumer products in several production departments. Management is evaluating the possibility of using segment performance mea- surement for each of its manufacturing departments. The department supervisors for each manufacturing department cannot agree on the best method of charging other departments for the products they make. One manager suggests each manufacturing department should be a separate profit center using a market value transfer price for all products transferred between departments. The other two production supervisors want the departments to oper- ate as cost centers. But one supervisor wants the transfer price to be based on actual product cost and the other wants to use a standard cost transfer price. Discuss the merits of using segmental performance measures and the advantages and disadvantages of each supervisor's argument.