Your answer is incorrect. What would be a legitimate reason for upper management to insist on an internal transfer even though the product could be sourced outside the company at a price that is lower than the company's variable cost? Management wants to ensure a secure supply of the product. There is never a legitimate reason that justifies an internal transfer if a product can be sourced outside the company at a price that is lower than the company's variable cost. Management is concerned that its manufacturing equipment will soon be obsolete, and it wants to get full use out of it before it happens. The company has excess capacity