What Is the Primary Problem with Using Discretionary Transfer Prices

question 19

Multiple Choice

What is the primary problem with using discretionary transfer prices to minimize costs in a decentralized organization?

• A) They don't really minimize tax costs.
• B) The appropriate transfer price to minimize costs cannot be determined by the parent company.
• C) The benefits of decentralization may be lost.
• D) They are extremely difficult to administer.

---

Definitions:

Biological Rhythms

Natural cycles of physical, emotional, or mental activity in living organisms, governed by internal biological clocks, such as circadian rhythms.

Sleep Apnea

A condition where an individual experiences interruptions in breathing or shallow breaths while asleep.

REM

Rapid Eye Movement, a unique phase of sleep characterized by fast, random movements of the eyes, vivid dreams, and increased brain activity.

Insomnia

A common sleep disorder that is characterized by difficulty falling asleep, staying asleep, or experiencing restorative sleep.