Which of the following is an advantage of cost-based transfer prices?
I$\quad $Managers do not have much incentive to reduce fixed costs
II$\quad $Managers may be motivated to purchase goods and services from outside the company
IV$\quad $Contribution margins may be split between buying and selling divisions
A) I only
B) II only
C) III only
D) None of the above (I, II, and III are all disadvantages)

Question

Which of the following is an advantage of cost-based transfer prices? 
I$\quad $Managers do not have much incentive to reduce fixed costs
II$\quad $Managers may be motivated to purchase goods and services from outside the company
IV$\quad $Contribution margins may be split between buying and selling divisions
A) I only
B) II only
C) III only
D) None of the above (I, II, and III are all disadvantages)

Quizplus · Accepted Answer

The Answer of Which of the following is an advantage of cost-based transfer prices? 
I$\quad $Managers do not have much incentive to reduce fixed costs
II$\quad $Managers may be motivated to purchase goods and services from outside the company
IV$\quad $Contribution margins may be split between buying and selling divisions
A) I only
B) II only
C) III only
D) None of the above (I, II, and III are all disadvantages)

Which of the Following Is an Advantage of Cost-Based Transfer \quad

Which of the Following Is an Advantage of Cost-Based Transfer $\quad$