For Each of the Following Statements Regarding the Satisfaction of Transfer

question 21

Essay

For each of the following statements regarding the satisfaction of transfer pricing criteria,identify whether you would expect the transfer pricing method to meet the criteria.Provide a 'yes','no' or 'sometimes' for each situation.

a.Market-based transfer pricing achieves goal congruence.
b.Cost-based transfer pricing achieves goal congruence.
c.Negotiated transfer pricing achieves goal congruence.
d.Market-based transfer pricing motivates management effort.
e.Cost-based transfer pricing motivates management effort.
f.Negotiated transfer pricing motivates management effort.
g.Market-based transfer pricing is useful for evaluating subunit performance.
h.Cost-based transfer pricing is useful for evaluating subunit performance.
i.Negotiated transfer pricing is useful for evaluating subunit performance.
j.Market-based transfer pricing preserves subunit autonomy.
k.Cost-based transfer pricing preserves subunit autonomy.
l.Negotiated transfer pricing preserves subunit autonomy.

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Definitions:

Optimistic

Having a positive or hopeful outlook on situations, believing that the most favorable outcomes are likely to occur.

Pessimistic

Having a tendency to see the worst aspect of things or believe that the worst will happen.

Gantt Charts

Gantt charts are visual project management tools used to schedule tasks within a project, showing start and end dates, as well as dependencies between tasks.

Flow Charts

Diagrams that depict the sequence of steps in a process, showing how tasks are interconnected and flow from one to the next.