Negotiated Transfer Pricing Is Not Always Used Because the Following

question 2

Multiple Choice

Negotiated transfer pricing is not always used because the following reasons, except that

• A)market price information is sometimes not easily obtainable.
• B)a lack of trust between the negotiating divisions may lead to a breakdown in the negotiations.
• C)negotiations often lead to different pricing strategies from division to division.
• D)opportunity cost is sometimes not determinable.

---

Definitions:

Fixed Cost

Regular, unwavering expenses in business operations that do not fluctuate with changes in production level or sales volume.

Cost Formula

An equation used to calculate the total cost of production or service delivery, considering both fixed and variable components.

Variable Selling Expenses

Costs associated with selling a product or service that vary directly with the level of sales or production volume.

Fixed Expenses

Costs that do not fluctuate with changes in production or sales volume, such as rent, salaries, and insurance.