32) A firm thought it solved its transfer price problem by deciding that the manager of Division A would simply sell units to the manager of Division B at the transfer price of cost. The problem with this choice would most likely be that:

Group of answer choices

only negotiated prices between the managers of Divisions A and B can result in the best outcome for the firm

most management theorists believe that transfer prices should always be set at market values

Division A has no incentive to control its costs

there are always other suppliers who could sell the needed component to Division B at less than the variable manufacturing cost incurred by another internal subunit like Division A