A Common Problem Associated with Transfer Pricing Occurs When

question 105

Multiple Choice

A common problem associated with transfer pricing occurs when

• A)a division purchases inputs for processing from an outside source at a price higher than the internal transfer price.
• B)the gross margin pricing method is used to compute the price.
• C)a division sells its excess output to an external customer.
• D)managers do not agree with the transfer prices of the inputs provided to them or of the outputs of their own division.

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Additional Benefits

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