Which of the Following Is a Legitimate Disadvantage of Negotiated

question 35

Multiple Choice

Which of the following is a legitimate disadvantage of negotiated transfer pricing?

• A)Negotiated based transfer pricing fails to provide adequate autonomy to divisional managers.
• B)Negotiated based transfer prices will always be higher than market price.
• C)Negotiated based transfer prices usually fail to allow the seller to cover variable costs.
• D)Negotiated prices may lead to some less than optimal decisions.

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Definitions:

Market Savvy

Refers to possessing a good understanding and insight into how market trends, customer preferences, and competitor behaviors influence the marketplace.

Product Development

the process of bringing a new product or service to market, from initial idea through design, development, and introduction to consumers.

Collaborates

The act of working jointly with others or together especially in an intellectual endeavor.

Expatriate

An individual who lives outside their native country, often for work reasons, embracing a new cultural environment while maintaining their original nationality.