All of the Following Are False About Transfer Pricing Except

question 21

Multiple Choice

All of the following are false about transfer pricing except:

• A)using negotiated transfer pricing is always the best approach.
• B)the cost approach can base the transfer price on either the variable cost or full absorption cost.
• C)using the cost approach is always the best approach.
• D)companies should always use the selling division's variable cost as the transfer price.
• E)None of the answer choices is correct.

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Definitions:

Internal Locus

The belief that one has control over life events and outcomes, as opposed to external forces having that control.

Self-serving Bias

The tendency to attribute positive events to one's own character but attribute negative events to external factors.

Unconditional Regard

A concept in psychology that refers to accepting and supporting someone regardless of what they say or do, typically used in the context of therapeutic relationships.

Reciprocal Determinism

A core concept of social cognitive theory that suggests individual behavior, environmental factors, and personal cognitive factors operate as interlocking determinants influencing each other.