Which of the following transfer-pricing methods always achieves goal congruence?
A) a market-based transfer price
B) a cost-based transfer price
C) a negotiated transfer price
D) full-cost plus a standard profit margin

Question

Quizplus · Accepted Answer

Negotiated transfer prices can achieve goal congruence because they allow the involved divisions to agree on a price that reflects the internal efficiency and opportunity costs of both divisions, aligning their goals with the overall company objectives.

Which of the Following Transfer-Pricing Methods Always Achieves Goal Congruence