Active management of transfer prices is likely to be the most advantageous when ______.

Question

Quizplus · Accepted Answer

Active management of transfer prices is most advantageous when intermediate products have no market price. This is because, in such situations, companies have more flexibility in setting transfer prices for transactions between their divisions or subsidiaries, which can be used strategically for tax optimization, profit allocation, and performance evaluation purposes.

Active Management of Transfer Prices Is Likely to Be the Most