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.

---

Definitions:

Imbalance Of Power

A situation in which there is a disproportionate distribution or exercise of power, often disadvantaging one party in relation to another.

Socialist

an individual who supports or advocates for socialism, a political and economic ideology that seeks to promote social ownership and egalitarian distribution of resources.

Mainstream Press

Refers to traditional media outlets, such as national newspapers and television networks, that reach a large audience and are considered mainstream.

Worker Control

Refers to the degree of power and autonomy workers have in managing the operations and decision-making processes within their workplace.