An Advantage of Using Budgeted Costs for Transfer Pricing Among

question 94

Multiple Choice

An advantage of using budgeted costs for transfer pricing among divisions is that ________.

• A) overall corporate profitability is usually higher
• B) it usually provides a basis for optimal decision making
• C) the divisions know the transfer price in advance
• D) it promotes subunit autonomy

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Definitions:

Voting Paradox

A situation in social choice theory where collective preferences can be cyclic (i.e., not transitive), even if the preferences of individual voters are not, leading to a lack of consistent aggregation of individual preferences into a coherent group order.

Impossibility Theorem

A principle, also known as Arrow's impossibility theorem, stating that it is impossible to devise a social welfare function that fairly ranks societal preferences in the presence of three or more options.

Voting Scheme

A method or system used for casting votes and determining the outcome in an election or decision-making process.

Individual Preferences

The specific likes, dislikes, desires, and needs that dictate the choices made by an individual, often influencing economic decisions and behaviors.