If a company is unable to use market-based transfer prices,the next best alternative is to use a price:
A) Based on negotiation.
B) Based on variable cost.
C) Based on standard cost.
D) Set by senior management.

Question

Quizplus · Accepted Answer

If a company is unable to use market-based transfer prices, the next best alternative is to use a price based on negotiation. This ensures that both parties agree upon a fair price, rather than simply relying on cost-based or senior management-set prices which may not accurately reflect the true value of the goods or services being transferred.

If a Company Is Unable to Use Market-Based Transfer Prices,the