Standard Costs Rather Than Actual Costs Should Be Used in Transfer-Pricing

question 7

Multiple Choice

Standard costs rather than actual costs should be used in transfer-pricing methods because:

• A)financial accounting rules (GAAP)require the use of standard costs.
• B)tax rules require the use of standard costs.
• C)standard costs are more readily available than actual costs.
• D)standard costs facilitate a professionally negotiated,amicable settlement between the buying and selling divisions.
• E)inefficient producing divisions could pass on their inefficiencies to buying divisions in the transfer pricE.

---

Definitions:

Nature-Nurture Debate

The ongoing discussion concerning the relative importance of an individual's innate qualities versus personal experiences in determining or causing differences in physical and behavioral traits.

Biopsychologist

A scientist who studies the physiological bases of behavior and mental processes, combining principles from biology and psychology.

Behavioral Neuroscientist

A scientist who studies the brain and nervous system to understand behaviors, emotions, and thoughts.

Biological Factors

Aspects of biology that influence an individual’s characteristics, behavior, and health, such as genes and hormones.