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Two of the decentralized divisions of Gambent Electronics Conporation are the Plastics Division and the Components Division. The Plastics Division seils molded parts to both

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Two of the decentralized divisions of Gambent Electronics Conporation are the Plastics Division and the Components Division. The Plastics Division seils molded parts to both the:Components Division and to customers outside the corpotation. Assume that the Plastics Divion is currently operating at full capacity. Nso assume that the Components Division wants to increase the number of parts it purchases from Plastics. In order to maintain its current level of profitabisity, the Plastics Division shouid not accept any transfer price on these additional parts that is beliow the Mungle choice variable cost of the aogotiond pans Muttiple Choice varoble cost of the additional perts. full fabsorption) cost of the additional parts. vanable cost of the odumonal perts plis the lost contribution margin on all units that could no longer be sold to cantomers outside the corporotion. corporocon

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