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A. The price on the open market.
B. The price representing the cash outflows of the supplying division plus the contribution to the supplying division from an outside sale.
C. The price set by charging for variable costs plus an additional markup, but less than full (absorption) cost.
D. The price usually set by an absorption costing calculation.
Answer (C) is correct.
This permits top management to enter the decision process and dictate that a division transfer at variable cost plus some appropriate amount.
Answer option >>>>>>>>>>> D. The price usually set by an absorption costing calculation.
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