The General Principle on Setting Transfer Prices That Are in the Organization's

question 31

Multiple Choice

The general principle on setting transfer prices that are in the organization's best interests is:

• A) outlay cost plus opportunity cost of the resource at the point of transfer.
• B) variable costs plus opportunity cost of the resource at the point of transfer.
• C) lost contribution margin less the allocated fixed costs for the selling division.
• D) gross margin for the buying division plus the gross margin for the selling division.