Cost-based transfer prices are helpful when markets are not perfectly competitive.

Name: Cost-based transfer prices are helpful when markets are not perfectly competitive.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Cost-based transfer prices are used when there is a lack of competitive market forces, where market prices may not be readily available or may be unreliable. In this scenario, transfer prices based on the cost of production or acquisition of goods can help to allocate resources efficiently and fairly within a company.

Cost-Based Transfer Prices Are Helpful When Markets Are Not Perfectly