Which of the Following Is Not True About Transfer Prices

question 109

Multiple Choice

Which of the following is not true about transfer prices?

• A)Creates costs for the selling subunit.
• B)Creates revenue for the selling subunit.
• C)Affects each subunit's operating income.
• D)Operating incomes used to evaluate subunits' performance.
• E)Operating incomes are not used to motivate managers.

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Definitions:

Industry Benchmarking

The practice of comparing business processes and performance metrics to industry bests and best practices from other companies to improve performance.

Performance Data

Information and statistics collected about the operations of a system or the activities of individuals and organizations to evaluate effectiveness or efficiency.

Aggregate

A whole formed by combining several separate elements; often used in the context of data or materials.

Efficiency Metrics

Quantitative tools used to assess the productivity and performance of a system or process, focusing on maximizing outputs with minimal inputs.