Which of the Following Is Not​ a Commonly Used Approach

question 97

Multiple Choice

Which of the following is not​ a commonly used approach to setting transfer prices?

• A) market price approach
• B) revenue price approach
• C) negotiated price approach
• D) cost price approach

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Definitions:

Standard Costs

Standard costs are predetermined costs established as targets for the production of goods or rendering of services, used as benchmarks to measure performance.

Actual Costs

The real expenses incurred or paid during a project or operation, as opposed to budgeted or estimated costs.

Differences

Refers to the disparities or variations that exist between two or more items, figures, or entities, often used in financial analysis and auditing.

Preset Costs

Preset costs are predetermined expenses that a company expects to incur in the carrying out of its operations.