Which of the following is not an issue a manager raises about full-cost transfer pricing?
A)How are each subunit's indirect costs allocated to products?
B)Have the correct activities bases been identified?
C)Have the correct cost pools been identified?
D)Have the correct cost-allocation bases been identified?
E)Have we considered that the current market price is a distress price?

Question

Quizplus · Accepted Answer

The issues raised about full-cost transfer pricing do not include market prices. Full-cost transfer pricing is based on the full cost of producing a product, including direct and indirect costs, and is not influenced by market prices. Therefore, option E is not an issue raised by managers about full-cost transfer pricing.

Which of the Following Is Not an Issue a Manager