An advantage of a negotiated transfer price is the ________.
A) close relationship between the negotiated price and the market price
B) negotiated transfer price preserves divisional autonomy
C) negotiations usually do not require much time and energy
D) simplicity of its computations and close approximation to market price

Question

Quizplus · Accepted Answer

The advantage of a negotiated transfer price is that it preserves divisional autonomy, meaning that each division can negotiate the transfer price that best suits its own interests and goals. This can help avoid conflicts between divisions and promote healthy competition within the company. The other options are not accurate advantages of a negotiated transfer price.

An Advantage of a Negotiated Transfer Price Is the ________