Which of the Following Is a Disadvantage of Dual Pricing

question 119

Multiple Choice

Which of the following is a disadvantage of dual pricing?

• A) It strongly preserves the autonomy of divisions, and the division managers are motivated to put forth effort to increase the operating income of their respective divisions, causing inefficiencies.
• B) The price arrived by using dual pricing has no specific relationship to either costs or the market price.
• C) It leads to disputes about which price should be used when computing the taxable income of subunits located in different tax jurisdictions.
• D) It assumes that the minimum transfer price equals the incremental cost per unit incurred up to the point of transfer minus the opportunity cost per unit to the selling division.

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Definitions:

Premotor Cortex

The premotor cortex is an area of the frontal cortex, located anterior to the primary motor cortex, involved in planning and executing movements.

Movement Sequences

The organization and execution of a series of movements in a specific order to perform a task.

Cerebral Blood Flow

Cerebral blood flow refers to the movement of blood through the network of blood vessels in the brain, ensuring the delivery of essential nutrients and oxygen required for brain function.

Finger Movements

The action or process of moving the fingers, which involves coordination of muscles, nerves, and skeletal structures to perform tasks.