If a firm uses a cost-based transfer price,its selling division will never be able to achieve goal congruence.

Name: If a firm uses a cost-based transfer price,its selling division will never be able to achieve goal congruence.
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Question

Quizplus · Accepted Answer

Cost-based transfer pricing can achieve goal congruence if the transfer price is set in a way that aligns the objectives of the selling division with those of the overall company, such as including a markup over cost that allows the selling division to earn a profit.

If a Firm Uses a Cost-Based Transfer Price,its Selling Division