Question
Consider the following statements regarding transfer prices: 1. Transfer price refers to the amount charged for goods and services exchanged between two divisions. II.
Consider the following statements regarding transfer prices: 1. Transfer price refers to the amount charged for goods and services exchanged between two divisions. II. The full cost transfer-pricing method can lead to dysfunctional decision-making behavior by managers. III. If the producing division has excess capacity, the general transfer-pricing rule and the external market price yield the same transfer price. Which of the above statements is (are) true? I and II. OI only. OI, II, and III. OI and III. Oll only.
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