Question
Which of the following is true about the idle capacity of a responsibility centre that sells products to another responsibility centre? Group of answer choices
Which of the following is true about the idle capacity of a responsibility centre that sells products to another responsibility centre?
Group of answer choices
Idle capacity provides a weak motivation for using variable costs as the transfer price.
Idle capacity provides a strong motivation for using variable costs as the transfer price.
Idle capacity provides a weak motivation for using fixed costs as the transfer price.
Idle capacity does not affect the determination of transfer price.
Idle capacity provides a strong motivation for using fixed costs as the transfer price.
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