Transfer prices would not be used by:
A) production centers.
B) investment centers.
C) profit centers.
D) cost centers.

Question

Quizplus · Accepted Answer

Cost centers are responsible for incurring costs and do not generate revenue or profit. Therefore, transfer prices are not relevant to cost centers. Production centers, investment centers, and profit centers are all responsible for generating revenue or profit, and may use transfer prices to allocate costs or determine performance.

Transfer Prices Would Not Be Used By