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Which of the following statements is true? i . Tthe seling division in a transfer pricing situation should want the transfer price to cover at
Which of the following statements is true?
i Tthe seling division in a transfer pricing situation should want the transfer price to cover at least the ful cost per unit olus the lost contribution maroirper unit on outside sales From the buving division's perspective, when a transfered item can be purchased from an outside suppier, the price charged by the outside supplierepresents an upper bound on the charge that should be made on transfers between the selling and buying divisions Whenever the seling dvision must aive up outside sales in order to sellintemaly, it has an opportunity cost that should be considered in setting thetransfer price The transfer price used for intenal transfers between divisions of the same company cannot affect the divisions reported profits
Multiple Choice
All of the statements are true.
Both statements and are true.
None of the statements are true
Both statements and are true
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