Which item is usually not relevant to a decision by the divisional manager to reduce the transfer price to meet a price offered to the buying division by an outside supplier? * O opportunity cost O variable manufacturing costs O fixed divisional overhead O the price offered by the outside supplier

Which item is usually not relevant to a decision by the divisional manager to reduce the transfer price to meet a price offered to the buying division by an outside supplier? * O opportunity cost O variable manufacturing costs O fixed divisional overhead O the price offered by the outside supplier

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 2CMA

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If a division manager’s compensation is based upon the division’s net income, the manager may decide to meet the net income targets by increasing production when using variable costing, in order to decrease net income. when using absorption costing, in order to decrease net income. when using variable costing, in order to increase net income. when using absorption costing, in order to increase net income.
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