I have an accounting question. Suppose that the Coffee Division is producing at capacity and can sell all that it produces to outside customers.

I have an accounting question. Suppose that the Coffee Division is producing at capacity and can sell all that it produces to outside customers. How should Santigui respond to Ashleigh’s request for a lower transfer price? What will be the effect on firmwide profits? Compute the effect of this response on each division’s profits. Can you give a solution?

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