When a Company Uses Activity-Based Transfer Prices

question 53

Multiple Choice

When a company uses activity-based transfer prices:

• A) The internal buyer is motivated to overstate the number of units to buy internally
• B) The internal buyer is motivated to understate the number of units to buy internally
• C) Capacity is usually reserved for products or services that are transferred internally
• D) Batch-level costs are excluded from the computation

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Definitions:

Patch Panel

Used with twisted pair cable as a central location to which network cables terminate. It mounts in a network wiring rack, has network ports on the front, and has wiring connected to the back to provide network connectivity.

Wireless Connectivity

The ability of devices to connect and communicate with each other without the need for physical cables, using RF (radio frequency) technology such as Wi-Fi or Bluetooth.

Hotspot

A physical location where people can access the internet, typically using Wi-Fi, via a wireless local area network (WLAN) with a router connected to an internet service provider.

Bluetooth

Bluetooth is a wireless technology standard for exchanging data over short distances, enabling the connection of devices such as smartphones, speakers, and wearables.