When the selling division cannot sell an item on the external market, using either a market-based or cost-based transfer for the item can lead to dysfunctional decisions.

Question

Quizplus · Accepted Answer

If the selling division cannot sell an item on the external market, using a market-based or cost-based transfer for the item can lead to dysfunctional decisions because it may not reflect the true value or cost of the item. This can lead to inefficient allocation of resources and negatively impact overall performance.

When the Selling Division Cannot Sell an Item on the External