Ideally, the price established for a transfer of goods or services between two decentralized organizational units within a company would be one that would always motivate the managers of both units to act in a way that is in the best interest of the company as a whole.

Question

Quizplus · Accepted Answer

This is the ideal type of transfer price; however, this ideal may have to be compromised to some extent in order to maintain a high level of autonomy for the managers of the decentralized organizational units.

Ideally, the Price Established for a Transfer of Goods or Services