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by the Chip Division is $14.50. It estimates that it will save $4.50 per
chip of selling expenses on units sold internally to the Board Division.
The Chip Division has no excess capacity.
Instructions
1. Calculate the minimum transfer price that the Chip Division should
accept. Discuss whether it is in the Chip Division's best interest to accept
the offer.
2.
Suppose that the Chip Division decides to reject the offer. What
are the financial implications for each division, and for the company as a
whole, of this decision?
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ACC 560 Week 5 Quiz 3 (Chapters 5 and 6)
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ACC 560 Week 5 Quiz 3 (Chapters 5 and 6)
Question 1
A company with a higher contribution margin ratio is
Question 2