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Assume a company has two divisions, Division A and Division B . Division A has provided the following information regarding the one product that it
Assume a company has two divisions, Division A and Division B Division A has provided the following information regarding the one product that it
manufactures and sells on the outside market:
Division B could use Division As product as a component part in the manufacture of units of its own newlydesigned product. Division B has received
a quote of $ from an outside supplier for a component part that is comparable to the one that Division A makes.
If the company's divisional managers are evaluated based on their division's profits and Division A is currently selling units on the outside market,
what is Division Bs highest acceptable transfer price if it were to buy units from Division A
Multiple Choice
$
$
$
$
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