When Establishing Transfer Prices,the Objective Is to Maximize the Company's

Multiple Choice

When establishing transfer prices,the objective is to maximize the company's profit by

A) transferring at the differential outlay cost to the selling division (typically variable costs) .
B) transferring at the opportunity cost to the company of making the internal transfers ($0 if the seller has idle capacity or selling price minus variable costs if the seller is operating at capacity) .
C) transferring at the differential outlay cost to the selling division plus the opportunity cost to the company of making the internal transfers.
D) None of the answers is correct.