Transfer prices do not affect managers whose compensation is directly dependent on an organization's operating income because transfer prices affect only divisional profits and not the organization's profit.

Name: Transfer prices do not affect managers whose compensation is directly dependent on an organization's operating income because transfer prices affect only divisional profits and not the organization's profit.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Transfer prices affect both divisional and organizational profits.

Transfer Prices Do Not Affect Managers Whose Compensation Is Directly