If there is a competitive market for the product being transferred internally,using the ________ as the transfer price will lead to ________.
A)full cost; managerial effort
B)variable cost; performance rewards
C)full cost plus profit; goal congruence
D)market price; goal congruence

Question

Quizplus · Accepted Answer

Using the market price as the transfer price will lead to goal congruence as it reflects the true value of the product in the competitive market. This approach ensures that the selling division is motivated to keep their prices competitive and the purchasing division only buys what is necessary and justified by the market.

If There Is a Competitive Market for the Product Being