Which of the following is not true about transfer prices?
A)Creates costs for the selling subunit.
B)Creates revenue for the selling subunit.
C)Affects each subunit's operating income.
D)Operating incomes used to evaluate subunits' performance.
E)Operating incomes are not used to motivate managers.

Question

Quizplus · Accepted Answer

Operating incomes are indeed used to motivate managers. They are a key metric in evaluating the performance of different subunits within a company, and managers are often incentivized based on these financial outcomes.

Which of the Following Is Not True About Transfer Prices