The negotiated price approach allows the managers of decentralized units to agree among themselves as to the transfer price.

Question

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The negotiated price approach is based on the mutual agreement of the managers of different units or divisions. The managers negotiate and agree on the transfer price that best suits their respective units or departments. This approach allows for a more flexible and adaptable transfer pricing system, as each unit's unique circumstances and needs can be taken into account during the negotiation process.

The Negotiated Price Approach Allows the Managers of Decentralized Units