Which of the following transfer-pricing methods motivates management effort?
A)a market-based transfer price
B)a negotiated transfer price
C)a cost-based transfer price based on budgeted costs
D)All of the above.

Question

Quizplus · Accepted Answer

All of the methods mentioned can motivate management effort. A market-based transfer price encourages competitiveness and efficiency, a negotiated transfer price fosters cooperation and mutual goal achievement, and a cost-based transfer price based on budgeted costs motivates managers to control costs and adhere to budgets.

Which of the Following Transfer-Pricing Methods Motivates Management Effort