The Weakness of a Cost-Plus Transfer Price Is That Cost

question 91

True/False

The weakness of a cost-plus transfer price is that cost recovery is guaranteed to the selling division,which may lead to failure to detect inefficient operating conditions and excessive cost incurrence.

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Definitions:

Sciatic Nerve

The longest and widest single nerve in the body, running from the lower back down through the leg.

Nerve Plexus

A network of intersecting nerves or nerve fibers.

Spinal Nerves

Nerves that emerge from the spinal cord, facilitating communication between the body and the brain.

Dorsal and Ventral Roots

The two types of nerve roots; dorsal roots carry sensory information to the spinal cord, while ventral roots carry motor information from the spinal cord to the muscles.