Which are true about transfer price?

1. Market-based transfer price should be used when the selling division has excess capacity.

2. Using market-based transfer price will help a multinational company avoid a dispute with a tax authority.

3. Cost-based transfer price is usually higher than market-based transfer price.

4. Opportunity cost must be included in a negotiated transfer price if the selling division has full capacity.

5. Fixed costs are not relevant in negotiated transfer price.