Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 22 - Management Control Systems, Transfer Pricing, and Multinational Considerations - Assignment Material - Questions - Page 865: 22-9

Answer

No, I don't agree. Transfer-pricing methods can lead to different division operating incomes. Various methods, such as market-based, cost-based, or hybrid pricing, have distinct principles and can result in varying profit allocations. The choice of transfer-pricing method can significantly impact division operating income, and the method selected should align with the organization's goals and objectives to achieve fairness and effectiveness in evaluating subunit performance.

Work Step by Step

No steps.
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.