The Transfer-Pricing Method That Reduces the Goal-Congruence Problems Associated with a Pure

question 89

Multiple Choice

The transfer-pricing method that reduces the goal-congruence problems associated with a pure cost-plus-based transfer-pricing method is:

• A)single pricing
• B)dual pricing
• C)market pricing
• D)Both A and B are correct.

Understand the concept of service department cost allocation.

Learn the step-down method for allocating service department costs.

Analyze the impact of different allocation bases on the distribution of service department costs.

Prepare schedules for allocating service department costs to production/operating departments using the direct method.

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