A Major Advantage of Using Actual Costs for Transfer Prices

question 90

True/False

A major advantage of using actual costs for transfer prices is that often inefficiencies are NOT passed along to the receiving division.

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Definitions:

Significant

Important or of consequence, often used to describe the extent to which something matters or impacts a given context.

Acquired Comparative Advantage

An economic concept where a country becomes more efficient at producing certain goods or services due to factors other than its natural endowments, such as technology or quality of education.

Automobiles

Vehicles designed for transporting passengers on roads.

Japanese Companies

Businesses or corporations based in Japan, often known for their management practices and technological advancements.