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Business
Study-set
Cost Accounting Foundations and Evolutions
Quiz
Quiz 13: Responsibility Accounting,support Department Allocations,and Transfer Pricing
Question 29
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Question 29
When using a market-based transfer price,a decision must be made how price disputes will be handled.
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Related Questions
Q24:
When using a negotiated transfer price,a determination must be made if comparable substitutes are available externally.
Q25:
In computing a transfer price,the maximum price should be no higher than the highest market price at which the buying segment can obtain the good or service externally.
Q26:
In computing a transfer price,the minimum price should be no lower than the incremental costs associated with the goods plus the opportunity cost of the facilities used.
Q27:
Transfer prices can be used to promote goal congruence among operating segments of an organization.
Q28:
Market based transfer prices are most effective for common high-cost and high-volume standardized services.
Q30:
When using a market-based transfer price,a decision must be made which market price to use.
Q31:
One of the main factors to consider when using a cost-based transfer price is whether to use actual or standard costs.
Q32:
A service department provides services that benefit other internal units of an organization.
Q33:
The most theoretically correct method of allocating service department costs is the algebraic method.
Q34:
Negotiated transfer prices are most appropriate for low cost and low volume services.