Division Alpha Can Purchase a Required Part from an Outside

question 72

Multiple Choice

Division Alpha can purchase a required part from an outside supplier for $35.
-Division Beta is willing to supply the part at a transfer price of $36.50,which is its incremental costs.Division Alpha's manager should

• A)pay the $38.50 price to Division Beta.
• B)tell his immediate supervisor that Division Beta is being unreasonable.
• C)negotiate an appropriate transfer price with the manager of Division Beta.
• D)buy from the outside supplier.

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