A Primary Characteristic of a Negotiated Transfer Price Is That

question 28

Multiple Choice

A primary characteristic of a negotiated transfer price is that it:

• A) Takes away the ultimate responsibility of the resulting transfer price from the two parties.
• B) Decreases sub-unit (i.e., divisional) autonomy.
• C) Can be costly and time-consuming to implement.
• D) Generally results in transferring more than the optimum number of units between the buying and selling divisions of the organization.
• E) Provides performance indicators that are independent of the negotiating skills of divisional managers.

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Definitions:

Subjects

Individuals under the rule of a monarch or government, often considered in relation to their rights and obligations.

Dutch Republic

A historic country in Europe that existed from the late 16th century to the late 18th century, known for its pioneering role in finance, trade, and the arts during the Golden Age.

Prosperous Commodities

Goods or products that generate significant wealth and economic growth through their trade or exploitation.

Predestination

A theological doctrine, especially in Calvinism, that suggests all events, including human salvation and damnation, are foreordained by a divine will.