Which of the following is an advantage of using cost-based transfer prices? Multiple Choice Such prices are an objective measure and easy to compute. Such prices motivate the buying division to control cost.
Which of the following is an advantage of using cost-based transfer prices? Multiple Choice Such prices are an objective measure and easy to compute. Such prices motivate the buying division to control cost.
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 18MC: A transfer pricing arrangement that uses the price that would be charged to an external customer is...
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![Which of the following is an advantage of using cost-based transfer prices?
Multiple Choice
Such prices are an objective measure and easy to compute.
Such prices motivate the buying division to control cost.
Such prices provide a sense of fairness.
Such prices will usually exceed the market-based or negotiated transfer prices.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F06b13176-f1c7-4f2c-8e34-914e2de9d27f%2F6cfa11af-b6bc-483d-9c14-6ed3b4f20adf%2Feywe8s_processed.png&w=3840&q=75)
Transcribed Image Text:Which of the following is an advantage of using cost-based transfer prices?
Multiple Choice
Such prices are an objective measure and easy to compute.
Such prices motivate the buying division to control cost.
Such prices provide a sense of fairness.
Such prices will usually exceed the market-based or negotiated transfer prices.
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