Setting Transfer Prices Can Be Especially Problematic When

question 60

Multiple Choice

Setting transfer prices can be especially problematic when

• A) Managers are evaluated based on non-financial factors
• B) Compensation is tied to the financial performance of responsibility centers
• C) Centralized decision making is the organizational norm
• D) Compensation is tied to the financial performance of the organization as a whole

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Definitions:

Coal

A flammable black or dark brown sedimentary rock primarily utilized for energy production.

Iron Ore

A naturally occurring mineral from which iron (Fe) is extracted to make steel and various other products.

Wildlife

Wild animals collectively; the native flora and fauna in a particular region not domesticated or cultivated by humans.

Mining Firm's Output

The total amount of minerals or resources produced by a mining company within a specific time period.