Cornerstones of Managerial Accounting Study Set 2
Quiz 12: Performance Evaluation and Decentralization
In the Negotiated Transfer Pricing, the Buying Division Sets the Ceiling
In the negotiated transfer pricing, the buying division sets the ceiling (maximum possible transfer price) for the bargaining range.
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The selling division would never agree to a transfer price below its full manufacturing cost.
Transfer pricing does NOT affect divisional profits.
Transfer pricing is a complex and often emotionally charged issue.
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