The Most Likely Result of Using a Negotiated Transfer Price

question 6

Multiple Choice

The most likely result of using a negotiated transfer price is that:

• A) The resulting decision reflects purely economic considerations.
• B) More than the optimum number of units will be transferred between divisions.
• C) Fewer than the optimum number of units will be transferred between divisions.
• D) It takes away from the buying and selling units the ultimate responsibility for determining the transfer price.
• E) The end result might reflect the relative bargaining skills of the negotiating managers.

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Definitions:

Laceration

A deep cut or tear in skin or flesh, often requiring medical attention to clean, close, and prevent infection.

Staples

Metal fasteners used to bind together papers or other materials, or a basic or necessary item of a particular field.

Biopsy Specimen

A small amount of tissue removed from the body for examination under a microscope to diagnose an illness.

Cryosurgery

The use of extreme cold to destroy unwanted tissue, such as skin lesions.