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:

Subduction Zone

A geological region where one tectonic plate moves under another, leading to various geological phenomena, including earthquakes and volcanoes.

Destructive Earthquakes

Earthquakes that result in significant damage and loss of life, often occurring near tectonic plate boundaries where energy release is concentrated.

Red Triangle

An area notorious for its frequency of shark attacks; without context, it could also simply refer to a geometric shape in a specific color.

Red Triangle

A region known for its high frequency of earthquakes and volcanic activity, often a specific geographic area noted for a particular type of natural hazard.