A Large Manufacturing Company Has Several Autonomous Divisions That Sell

question 52

Multiple Choice

A large manufacturing company has several autonomous divisions that sell their products in perfectly competitive external markets as well as internally to the other divisions of the company.Top management expects each of its divisional managers to take actions that will maximize the organization's goal as well as their own goals.Top management also promotes a sustained level of management effort of all of its divisional managers.Under these circumstances,for products exchanged between divisions,the transfer price that will generally lead to optimal decisions for the manufacturing company would be a transfer price equal to the: (CIA adapted)

• A)full cost of the product.
• B)full cost of the product plus a markup.
• C)variable cost of the product plus a markup.
• D)market price of the product.

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Definitions:

Appadurai's Landscapes

Refers to Arjun Appadurai's conceptual framework on the fluid, dynamic global cultural flows categorized into five dimensions: ethnoscapes, technoscapes, financescapes, mediascapes, and ideoscapes.

Nation-States

Politically sovereign entities characterized by a defined territory, permanent population, a government, and the capacity to enter into relations with other states.

Disjunctures

Points of disruption or disconnection in societal, cultural, or technological systems, where expected flows or relationships are broken.

George Ritzer

George Ritzer is an American sociologist known for his work on consumerism, globalization, and the theory of McDonaldization, which describes the increasing rationalization of society.