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Unformatted text preview: price, but Indian Division would refuse to transfer since $720 could be earned in the outside market. 2. The market price is $720. Both Maple and Indian divisions would be willing to transfer at that price (since neither division would be worse off than if it bought/sold in the outside market). 3. Minimum transfer price = $720 – $120 = $600 This price is set by Indian Division, the selling division. Maximum transfer price = $720. This price is the market price and is set by Maple Division, the buying division. Yes, both divisions would be willing to accept a transfer price within the bargaining range. Precisely what the transfer price would be depends on the negotiating skills of the Indian and Maple division managers....
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This note was uploaded on 10/20/2011 for the course ACC 222 taught by Professor Brewer during the Spring '08 term at Miami University.
- Spring '08
- Managerial Accounting