You Are the General Manager of the Machining Products Division

question 192

Multiple Choice

You are the general manager of the machining products division of a diversified manufacturing company in Des Moines, Iowa. You primarily produce machining products for sale to wholesalers around the world. However, you periodically get requests from other divisions in your company to purchase your products. You treat these purchase requests the same as a purchase request from a non-affiliated entity. You sell your machining products to other internal divisions at a price that is equivalent to a market-based cost.This is example of which of the following types of business pricing? ​

• A)Freight absorption pricing
• B)Uniform geographic pricing
• C)Transfer pricing
• D)Zone pricing
• E)Base-point pricing

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Definitions:

Payments

The act of transferring money or goods in exchange for a product or service, or the fulfillment of an obligation.

Compound-Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods of a deposit or loan.

Guaranteed Interest Rates

Interest rates promised to remain constant over a defined period, often associated with savings instruments like fixed deposits.

Maturity Value

The amount payable to an investor at the end of a fixed term investment.