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What is a disadvantage of full-cost transfer pricing? Question 8 options: Can not facilitates short-run pricing decisions Can help in making strategic pricing decisions for
What is a disadvantage of full-cost transfer pricing? Question 8 options: Can not facilitates short-run pricing decisions Can help in making strategic pricing decisions for the long term, considering the full cost implications of production and transfer. Full-cost transfer pricing provides a comprehensive view of the total manufacturing costs, including both variable and fixed costs. Full-cost transfer pricing may allocate fixed costs that are incurred at the corporate level as variable costs to the divisions. This can create a perception that by not transferring units, divisions are saving both variable and fixed costs Potentially leading to suboptimal decisions as divisions may prioritize short-term cost savings over long-term efficiency
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