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Division a Produces a Component and Wants to Sell It

Question 56

Multiple Choice

Division A produces a component and wants to sell it to Division B.The transfer price is


A) revenue to Division 'A' and a cost to Division B.
B) revenue to Division 'B' and a cost to Division A.
C) revenue to Division 'A' and no effect on Division B.
D) a cost to Division 'B' and no effect on Division A.

Correct Answer:

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