Which of the Following Is a Disadvantage of Dual Pricing

question 8

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 insulates managers from the realities of the marketplace because costs, not market prices, affect the revenues of the supplying division.
• 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:

Conflict Management

The practice of identifying and handling conflicts in a sensible, fair, and efficient manner.

Not Paying Attention

The lack of focus or concentration on a task or the present moment, often leading to errors or missed information.

Competing

A conflict management style using formal authority or other power that you possess to satisfy your concerns without regard to the concerns of the party that you are in conflict with.

Conflict Management

A process aimed at reducing or eliminating sources of conflict through various strategies and problem-solving techniques.