_______________ is(are) the transfer price that would leave the selling division no worse off if the good is sold to an internal division.
A) The negotiated transfer price
B) The minimum transfer price
C) The maximum transfer price
D) Both a and c

Question

Quizplus · Accepted Answer

The minimum transfer price is the transfer price that ensures the selling division is no worse off by selling to the internal division rather than selling to an external customer. This is because the selling division should at least cover its variable costs and not operate at a loss. The negotiated transfer price and the maximum transfer price do not necessarily guarantee that the selling division will not be worse off, as they may not consider the selling division's costs and profitability.

_______________ Is(are) the Transfer Price That Would Leave the Selling