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

question 42

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:

Ethical Competition

The practice of competing fairly and ethically within a market, adhering to moral standards and avoiding practices that harm consumers or competitors.

Physical Contact

The act of touching or being in direct contact with someone or something.

Assaulted

Being subjected to a sudden, violent attack or an attempt to cause physical harm to another person.

Defamation

The act of communicating false statements about a person, resulting in damage to that person's reputation or standing.