Which of the following statements is false, with respect to a negotiated transfer price?
A) The profit of each division will depend on the negotiating skills of the managers.
B) The process always results in a spirit of cooperation and unity that is desirable throughout an organisation.
C) The market price is usually the base line for negotiations.
D) Negotiations can lead to divisiveness and competition between participating business unit managers.

Question

Quizplus · Accepted Answer

Negotiating a transfer price does not always result in a spirit of cooperation and unity. In fact, negotiations can sometimes lead to divisiveness and competition between participating business unit managers. It is up to the managers to maintain a cooperative and collaborative approach during the negotiation process.

Which of the Following Statements Is False, with Respect to a Negotiated