What Is the Primary Advantage of a Negotiated Transfer Price

question 3

Multiple Choice

What is the primary advantage of a negotiated transfer price?

• A) It is objectively determined.
• B) It reflects managers' ability to control cost.
• C) It is based on arms-length transactions with unrelated parties.
• D) It preserves managerial autonomy to make decisions.

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Definitions:

Sales Reps

Individuals who are employed to sell products and services for a company.

Sales Manager

A professional responsible for directing and overseeing a team of salespeople, setting sales goals, and developing strategies to achieve those goals.

Consumer Goods

Consumer goods are products bought for personal or household use, intended for direct consumption or use by the end consumer.

Matrix Departmentation

A complex organizational structure that combines two or more types of departmentalization, often project and functional lines, to leverage the benefits of both.