Indicate Whether Each of the Following Statements About Transfer Pricing

question 3

Short Answer

Indicate whether each of the following statements about transfer pricing is true or false.
When the selling division is currently operating at capacity,goods should not be transferred to other divisions within a company.______
A transfer price is the price used in making sales between divisions or other segments in a company.______
Most companies use a market-based price as the basis for setting transfer prices.______
The lower the transfer price is,the higher the profit for the purchasing division.______
The level of the transfer price affects the reported profits of the selling division and the purchasing division,as well as the company as a whole.______