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A company has two divisions, Alpha and Bravo. Alpha sells a part to Bravo and recently raised the part's transfer price. This increase in price
A company has two divisions, Alpha and Bravo. Alpha sells a part to Bravo and recently raised the part's transfer price. This increase in price had no effect on either the volume of parts transferred or on Bravo's decision to get the part from either Alpha or from an outside supplier. Given this data, which of the following correctly shows the effect of the transfer price on divisional profit and overall company profit? Bravo Profit A. B. Alpha Profit Increase Increase Decrease Increase No Effect Decrease Decrease Increase Increase No Effect Company Profit Increase No Effect No Effect Increase No Effect
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