If a Product Has an External Market and Divisions Are

question 37

True/False

If a product has an external market and divisions are treated as profit centres, cost-based transfer prices can often lead to suboptimal decisions.

---

Definitions:

Extra Hours

Additional time worked beyond the standard or scheduled working hours.

Family

A social unit consisting of parents and their children, considered as a group, whether dwelling together or not; often extends to include relatives.

Customer Service

Assistance and advice provided by a company to those people who buy or use its products or services.

Frontline Employees

Workers who directly interact with customers, representing the face of the company and playing a critical role in customer service.