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:

Austria-Hungary

Austria-Hungary, also known as the Austro-Hungarian Empire, was a dual monarchy in Central Europe from 1867 to 1918, composed of the Austrian Empire and the Kingdom of Hungary.

Balkans Crisis

A sequence of political and military events in the early 20th century that escalated tensions among the Great Powers and contributed to the outbreak of World War I.

Adriatic

A body of water separating the Italian Peninsula from the Balkan Peninsula, and the Adriatic Sea is known for its deep blue waters and historic coastal communities.

Francis Ferdinand

Archduke of Austria-Este whose assassination in Sarajevo in 1914 sparked the beginning of World War I.