Which of the following is a reason there are divisional conflicts over the transfer price?
A)the manager of the upstream division prefers a transfer price that is too high
B)the manager of the downstream division prefers a transfer price that is too low
C)the corporate headquarters does not have enough information to determine the correct transfer price
D)all of the above

Question

​Which of the following is a reason there are divisional conflicts over the transfer price?
A)​the manager of the upstream division prefers a transfer price that is too high
B)the manager of the downstream division prefers a transfer price that is too low
C)the corporate headquarters does not have enough information to determine the correct transfer price
D)​all of the above

Quizplus · Accepted Answer

All of the given options can lead to conflicts over determining the appropriate transfer price. If the manager of the upstream division prefers a higher transfer price, it can result in the downstream division paying more than what they would have to pay in the open market. Conversely, if the manager of the downstream division prefers a lower transfer price, the upstream division may receive less revenue than they could get in the open market. Lastly, if corporate headquarters does not have adequate information to set a fair transfer price, it can also result in divisional conflicts.

​Which of the Following Is a Reason There Are Divisional

Which of the Following Is a Reason There Are Divisional