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A company has two divisions, Alpha and Bravo Bravo makes a part that Alpha can use. Bravo's variable manufacturing cost is $2.40, shipping cost is

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A company has two divisions, Alpha and Bravo Bravo makes a part that Alpha can use. Bravo's variable manufacturing cost is $2.40, shipping cost is $0.14, and sales price to outside customers is $3.40. No shipping costs would be incurred on sales to Alpha, and Alpha can purchase the part from an outside supplier for $3.00. If Bravo has enough capacity to meet all of the needs of both its outside customers and Alpha, and uses the general rule for transfer pricing, the transfer price from Bravo to Alpha will be: Multiple Choice

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