A Major Advantage of Using Actual Costs for Transfer Prices

question 90

True/False

A major advantage of using actual costs for transfer prices is that often inefficiencies are NOT passed along to the receiving division.

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Definitions:

Subagent

A representative or agent appointed by another agent who also has the authority and responsibility to perform specific tasks on behalf of the original agent's principal.

In-house Counsel

A lawyer or team of lawyers employed directly by a corporation or organization to provide legal advice and services.

Nonemployee Agent

A nonemployee agent typically contracts with the principal to produce a result and determines for himself or herself how that result will be accomplished. Also called an independent contractor.

Independent Contractor

An individual or entity contracted to perform work for another entity as a non-employee, often with greater control over how the work is completed.