Which of the Following Statements About Cost-Based Transfer Prices Is/are

question 90

Multiple Choice

Which of the following statements about cost-based transfer prices is/are true?
i. A transfer price set at standard variable cost plus a mark-up provides an incentive for the supplying business to make the transfer.
ii. Absorption cost-based transfer prices are good for the company as a whole because all costs are considered.
iii. Transfer prices should be based on standard costs rather than actual costs since the cost of inefficiency should not be passed on.

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

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Definitions:

Color Vision

The ability of the visual system to distinguish objects based on the wavelengths of the light they reflect, emit, or transmit.

Cones

Photoreceptor cells in the retina of the eye that function best in relatively bright light and enable the perception of color.

Dim Light

A low level of illumination, often creating a subdued or intimate atmosphere.

Cones

Photoreceptor cells in the retina of the eye that are responsible for color vision and function best in relatively bright light.