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Spring Corp. has two divisions, Daffodil and Tulip. Daffodil produces a gadget that Tulip could use in its production. Tulip currently purchases 200,000 gadgets for
Spring Corp. has two divisions, Daffodil and Tulip. Daffodil produces a gadget that Tulip could use in its production. Tulip currently purchases 200,000 gadgets for $14.50 on the open market. Daffodil's variable costs are $8.00 per widget while the full cost is $12.35. Daffodil sells gadgets for $15 each. If Daffodil is operating at capacity, what would be the maximum transfer price Tulip would pay internally? Multiple Choice $14.50 $8.00 $12.35 $15.00
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