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will be eliminated. The overall average cost of the firm will decrease because if the divisions are under same management control then there will be in house supply and departmental heads will determine the transfer price. An example could be pokarna granites limited. The company was established in 1991 as a partnership firm quarrying black galaxy granite in India. Transportation of granite to factories where they can be cut and polished is quite difficult. Since that time, the company has grown to a major quarrier and fabricator of stones from India and around the world. From the very beginning, the company has believed in vertical integration...
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