Asked by Scarlet Melliz on Apr 27, 2024
Verified
The objective of transfer pricing is to encourage each division manager to transfer goods and services between divisions if overall company income can be increased by doing so.
Transfer Pricing
The pricing of goods, services, and intangibles between related legal entities within an enterprise to optimize tax liabilities and profit allocation.
Division Manager
An individual responsible for overseeing a specific division within a company, ensuring its operational and financial performance.
- Determine the strategies through which transfer pricing among units can amplify the total revenue of a firm.
Verified Answer
RR
Rylee RodriguezMay 04, 2024
Final Answer :
True
Explanation :
The statement correctly defines the objective of transfer pricing. The purpose of transfer pricing is to create incentives for division managers to transfer goods and services between different divisions in order to maximize the overall income of the company.
Learning Objectives
- Determine the strategies through which transfer pricing among units can amplify the total revenue of a firm.
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