The MOST likely result of a negotiated transfer price is that it:
A)takes away the ultimate responsibility of the resulting transfer price from the two parties.
B)may reflect the relative negotiating skills of the two parties.
C)generally results in transferring more than the optimum number of units.
D)reflects purely economic considerations.

Question

Quizplus · Accepted Answer

Negotiating a transfer price is a process that involves bargaining between two parties to agree on a price for transferring goods or services. The outcome of the negotiation is influenced by various factors, including the negotiating skills of the parties. Therefore, option B is the most likely result of a negotiated transfer price. Option A is incorrect because negotiating a transfer price may not necessarily take away the ultimate responsibility of the resulting transfer price from the two parties. Option C is incorrect because negotiating a transfer price does not result in transferring more than the optimum number of units unless there is an agreement to do so. Option D is incorrect because negotiating a transfer price takes into account various considerations, including non-economic ones.

The MOST Likely Result of a Negotiated Transfer Price Is