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Which of the following is a legitimate disadvantage of a 100%-of-variable-cost transfer pricing? This price will not allow the selling division to make a long-run

Which of the following is a legitimate disadvantage of a 100%-of-variable-cost transfer pricing?

This price will not allow the selling division to make a long-run profit.

This price will discourage the purchasing division from buying internally.

At this price, if the selling division does not have excess capacity, the selling division will not wish to sell anything to the outside market.

If the selling division has excess capacity, this transfer price will often lead the purchasing division to act inconsistently with corporate goals.

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