When a Division Is Operating at Capacity,the Transfer Price Should

question 109

Multiple Choice

When a division is operating at capacity,the transfer price should be ________.

• A) based on opportunity cost
• B) a market-based transfer price
• C) a cost-based transfer price
• D) the total manufacturing cost

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Definitions:

Job Analysis Process

A systematic examination of the tasks, responsibilities, and qualifications needed for a specific job, used for recruitment and performance evaluation.

Realistic Job Preview

A recruitment tool that provides potential applicants with a true representation of the responsibilities and conditions of a job.

Indexation

A method of estimating future employment needs by matching employment growth with a selected index, such as the ratio of production employees to sales.

Underutilization

A condition that exists when a department or employer has a lesser proportion of members of a protected class than are found in the employer’s labour market.