(Selection of type of transfer pricing) A multiple-division company is considering the effectiveness of its transfer pricing...
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(Selection of type of transfer pricing) A multiple-division company is considering the effectiveness of its transfer pricing policies. One of the items under consid¬ eration is whether the transfer price should be based on variable production cost, absorption production cost, or external market price. Describe the circumstances in which each of these transfer prices would be most appropriate.
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