Answered: The primary objective of a transfer…

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

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter11: Strategic Cost Management

Section: Chapter Questions

Problem 1DQ: What does it mean to obtain a competitive advantage? What role does the cost management system play...

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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

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Similar questions

A transfer pricing structure that considers the opportunity costs of selling to internal rather than external customers uses_______. A. the cost approach B. the general transfer pricing approach C. the market-based approach D. the opportunity cost approach
Although the cost-plus approach to product pricing may be used by management as a general guideline, what are some examples of other factors that managers should also consider in setting product prices?
Discuss the advantages and disadvantages of a market-based transfer pricing approach.
Discuss the advantages and disadvantages of a cost-based transfer pricing approach.
The three common approaches to setting transfer prices include: the _____ price approach, where the transfer price is the price at which the product or service transferred could be sold to outside buyers; the _____ price approach allows the managers to agree among themselves on a transfer price; and the _____ price approach, where cost is used to set transfer prices. cost; market; negotiated market; cost; negotiated market; negotiated; cost negotiated; market; cost none of the above
In a management setting, does Transfer Pricing affects Absorption & Variable, Budgeting, and Responsibility Accounting, individually or collectively? Or is it the other way around?
2. explain the transfer pricing method that is used / can be used in this company. Explain the advantages and disadvantages?
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.
Many organizations use transfer pricing when transferring products between different divisions of the same organisation. Critically discuss the advantages and disadvantages of the method: Market based transfer price. Note: Define, explain gives examples and advantages and disadvantages
In a management setting, does Transfer Pricing affects the previous topics - Absorption & Variable, Budgeting, and Responsibility Accounting, individually or collectively? Or is it the other way around?
Many organizations use transfer pricing when transferring products between different divisions of the same organisation. Critically discuss the advantages and disadvantages of the method: Negociated transfer price. Note: Define, explain gives examples and advantages and disadvantages
What transfer price, or range of prices, would ensure goal congruence among the division managers? Show your calculations.