Asked by Hassan Shami on Sep 24, 2024
Verified
Which of the following is a reason there are divisional conflicts over the transfer price?
A) the manager of the upstream division prefers a transfer price that is too high
B) the manager of the downstream division prefers a transfer price that is too low
C) the corporate headquarters does not have enough information to determine the correct transfer price
D) all of the above
Transfer Price
The price at which goods and services are sold between divisions within the same company or different companies under the same ownership.
Upstream Division
A segment of a company or industry involved in the early stages of production or supply chain, often dealing with raw materials.
Downstream Division
A segment or part of an organization focused on the later stages of production or distribution in the supply chain, such as sales and delivery of the final product.
- Understand the underlying factors and resolution strategies for disputes between distinct sectors in an organization.
- Determine the elements affecting the efficacy of intercompany transfer pricing.
Verified Answer
Learning Objectives
- Understand the underlying factors and resolution strategies for disputes between distinct sectors in an organization.
- Determine the elements affecting the efficacy of intercompany transfer pricing.
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