28

In setting internal transfer prices, the minimum price that the selling division would accept is

a price that will result in a profit to the selling division.

a price that will result in a profit to the purchasing division.

its variable cost of the product plus opportunity costs lost by the transfer.

its variable cost plus an internal profit margin.

29

In setting internal transfer prices, the maximum price that the purchasing division would accept is

a price that will result in a profit to the selling division.

a price that will result in a profit to the purchasing division.

its variable cost of the product plus opportunity costs gained by the transfer.

its external cost to purchase the product.