When a Transfer Price Is Set Lower

question 56

Multiple Choice

When a transfer price is set lower

• A)the buying division will want to sell less to the selling division
• B)the buying division will want to sell more to the selling division
• C)the selling division will want to sell less to the buying division
• D)the selling division will want to sell more to the buying division

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Definitions:

Liaison Between Groups

A role or function that facilitates communication and coordination between different groups or departments within an organization.

Compromise Mechanism

A strategy used in conflict resolution where each party gives up something to reach a mutually acceptable solution.

Identification

A compromise mechanism whereby an individual patterns his or her behavior after another’s.

Patterns Behavior

The repeated actions or reactions exhibited by individuals or groups in response to certain stimuli or situations.