All of the Following Are Correct Statements About the Market-Based

question 131

Multiple Choice

All of the following are correct statements about the market-based approach except that it

• A) assumes that the transfer price should be based on the most objective inputs possible.
• B) provides a fairer allocation of the company's contribution margin to each division.
• C) produces a higher company contribution margin than the cost-based approach.
• D) ensures that each division manager is properly motivated and rewarded.

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Definitions:

Reasonably Preventable

Referring to measures or actions that can be taken to reasonably avoid or mitigate a certain risk or harm.

Product Liability Laws

Legal rules concerning the responsibility of manufacturers and sellers for injuries caused by defective products they provided.

Ground-Up

To start something from nothing, building it step by step from the foundation.

Design Specifications

Detailed descriptions of the requirements for the components, materials, and performance of a product or project.