Which of the Following Statements About Transfer Prices Is/are True

question 75

Multiple Choice

Which of the following statements about transfer prices is/are true?
i. When the producing division has excess capacity and the external market is imperfectly competitive, the general transfer-pricing rule and the external market price will be the same.
ii. If the transfer price is set at the market price, the supplying division will be indifferent to selling internally or externally.
iii. If the transfer price is set at the market price, the buying division will usually purchase goods from inside its organisation, if product specifications are met.

• A) i and ii
• B) ii and iii
• C) i and iii
• D) All of the given answers

---

Definitions:

Reptiles

A class of cold-blooded, scaly vertebrates that breathe air through lungs, including snakes, lizards, turtles, and crocodiles.

Morphological Structures

The form and structure of organisms or specific parts of an organism, often used in the context of biology to describe the physical shape and size of various aspects.

Eutherian Mammal

Mammals that develop within the uterus of the female and are nourished before birth through a placenta, synonymous with placental mammals.

Rodentia

An order of mammals also known as rodents, characterized by a pair of continuously growing incisors in both the upper and lower jaws that must be kept short by gnawing.