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ster Price Compa The Transfer Price Company has two divisions (Intermediate and Final) that report to the office (Corporate). The two divisions are profit centers.
ster Price Compa The Transfer Price Company has two divisions (Intermediate and Final) that report to the office (Corporate). The two divisions are profit centers. Intermediate produces a proprie (called "intermed") that it sells both inside the firm to Final and outside the firm. Final can only pur chase intermed from Intermediate because Intermediate holds the patent to manufacture int Intermed's variable cost is $15 per unit, and Intermediate has excess capacity in the sense that it ca satisfy demand from both its outside customers and Final. Final buys one intermed from Intermets ate, incurs an additional variable cost of $5 per unit, and sells the product (called "final") to extema consumers. Final faces the following demand schedule for final tary produt ermed Price $420 400 380 360 340 320 300 280 260 240 Quantity 10 12 13
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