With Two Autonomous Division Managers,the Price of Goods Transferred Between

question 121

Multiple Choice

With two autonomous division managers,the price of goods transferred between the divisions needs to be approved by

• A)corporate management.
• B)both divisional managers.
• C)both divisional managers and corporate management.
• D)corporate management and the manager of the buying division.

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Definitions:

Corresponding Cost

Corresponding cost refers to the specific expenses directly associated with the production of a good or service, similar to direct costs.

Discount Period

The time frame in which a payment can be made at a discounted rate from the total amount owed.

Perpetual

An inventory system where updates are made continuously to the inventory records, reflecting each sale or purchase.

Periodic Inventory System

An inventory system in which the inventory count and the cost of goods sold calculation are performed at set intervals, typically at the end of an accounting period.