Division
B、of a company makes units which are then transferred to other divisions. The division has no spare capacity. The following statements have been made regarding the minimum transfer price that will encourage the divisional manager of
B、to transfer units to other divisions: (1) Any price above variable cost will generate a positive contribution, and will therefore be accepted. (2) The division will need to give up a unit sold externally in order to make a transfer; this is only worthwhile if the income of a transfer is greater than the net income of an external sale. Which of the above statement(s) is/are true?
A、(1) only
B、(2) only
C、Neither (1) nor (2)
D、Both (1) and (2)
B、of a company makes units which are then transferred to other divisions. The division has no spare capacity. The following statements have been made regarding the minimum transfer price that will encourage the divisional manager of
B、to transfer units to other divisions: (1) Any price above variable cost will generate a positive contribution, and will therefore be accepted. (2) The division will need to give up a unit sold externally in order to make a transfer; this is only worthwhile if the income of a transfer is greater than the net income of an external sale. Which of the above statement(s) is/are true?
A、(1) only
B、(2) only
C、Neither (1) nor (2)
D、Both (1) and (2)
【参考答案及解析】
(2) only
(2) only