Which of the following is not an outcome of market-based transfer prices in perfectly competitive markets?
A)Promote goal congruence.
B)Motivate management effort.
C)Evaluate subunit performance.
D)Preserve subunit autonomy.
E)Eliminate goal congruence.

Question

Quizplus · Accepted Answer

Market-based transfer prices in perfectly competitive markets promote goal congruence, motivate management effort, and evaluate subunit performance. They also preserve subunit autonomy by allowing subunits to determine their own production levels and pricing strategies. Eliminating goal congruence would defeat the purpose of using transfer prices in the first place. Therefore, E is not an outcome of market-based transfer prices.

Which of the Following Is Not an Outcome of Market-Based