Assuming a Company Uses a Cost-Based Pricing System for Transfer

question 96

Multiple Choice

Assuming a company uses a cost-based pricing system for transfer pricing,which of the following items would NOT be used?

• A) variable-costing only
• B) full-costing plus profit only
• C) full-costing only
• D) fixed-costing only

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Definitions:

Formal Hierarchy

An organizational structure where individuals are ranked according to their levels of authority and responsibility, forming a clear chain of command.

Centralized Structure

An organizational structure where decision-making authority is concentrated at the top levels of management.

Organic Structure

Is a flexible, decentralized organizational structure with less formal procedures, open communication channels, and a focus on adaptability and teamwork.

Decentralized Decision

A management strategy where decision-making powers are distributed among various levels of the organization rather than being concentrated at the top.