Cost-based transfer price is the best transfer price because it is very easy to measure and understand. True or False
Cost-based transfer price is the best transfer price because it is very easy to measure and understand.
True or False
4.The use of market price in internal transfers, generally, provides managerial incentive and leads to better overall efficiency in operations.
True or False
When the selling division has no idle capacity, it is always best to negotiate a transfer price with the buying division if they will profit from the transfer.
True or False
When a buying division purchases from outside supplier because the minimum transfer price is higher than their maximum transfer price, there is suboptimization, as the entire company could have benefited if the internal transfer occurs.
True or False
The primary objective of a transfer pricing system/scheme/policy is to motivate segment managers to make decisions that are aligned with the overall goals of the company.
True or False
Transfer price is the price charged by the supplier to the customer
True orFalse
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