When Considering Setting the Transfer Price at the Market Price

question 16

Multiple Choice

When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market

• A)It is appropriate to ignore that the market price includes a margin above marginal cost
• B)Consider whether the product on the market includes costly features your downstream division does not use
• C)it is OK if the product on the market is inexpensive because its quality is lower than you use
• D)if it is similar enough,it is justification for you producing it in-house

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Definitions:

Bodily Responses

Refers to the physiological reactions or changes in the body that occur in response to stimuli or emotions.

External Stimulus

An external stimulus is any factor, signal, or condition outside of an organism that can elicit a physiological or psychological response from it.

Controlling Emotion

The process of managing one's feelings to appropriately respond to various situations and to achieve emotional well-being.

Cognitive Attributional

Refers to the process of explaining the causes of behavior and events, focusing on the role of thought processes in such attributions.