The price charged for the transferred good affects the costs of the buying division and the revenues of the selling division.

Question

Quizplus · Accepted Answer

When a good is transferred between divisions of the same company, it is necessary to determine a transfer price. The transfer price affects both the costs of the buying division and the revenues of the selling division, as they are essentially buying and selling from each other. Therefore, the statement is true.

The Price Charged for the Transferred Good Affects the Costs