Which of the following is not true about hybrid transfer prices?
A)Hybrid transfer prices take into account both cost and market information.
B)Top management may administer prices by specifying a transfer price that is an average of the cost of producing and transporting the product internally.
C)The most common form of hybrid price arises via negotiation.
D)Information regarding costs and prices plays a critical role in this bargaining process.
E)Managers never negotiate transfer prices because they will show as a loss of profits.

Question

Quizplus · Accepted Answer

The statement "Managers never negotiate transfer prices because they will show as a loss of profits" is not true. In fact, negotiations are a common way to determine hybrid transfer prices. The other options are all true statements about hybrid transfer prices.

Which of the Following Is Not True About Hybrid Transfer