Which of the following is not considered criteria used by managers to evaluate transfer prices?
A)Promotes goal congruence.
B)Induces managers to exert a high level of effort.
C)Helps top management evaluate the performance of individual subunits.
D)Preserves a high degree of subunit autonomy in decision making if top management favors a high degree of decentralization.
E)Subunits selling a product of service should not be motivated to hold down their costs.

Question

Quizplus · Accepted Answer

The statement "Subunits selling a product of service should not be motivated to hold down their costs" is not a criteria used by managers to evaluate transfer prices. In fact, cost savings and efficiency are often important considerations in setting transfer prices. The other options are all commonly considered criteria for evaluating transfer prices.

Which of the Following Is Not Considered Criteria Used by Managers