Which of the following are drawbacks related to negotiated transfer prices?
A) Negotiations can lead to divisiveness and competition between participating division managers
B) Negotiating skill should not be the sole or dominant factor in evaluating a division manager
C) Both are drawbacks
D) Neither are drawbacks

Question

Quizplus · Accepted Answer

Both A and B describe valid drawbacks of using negotiated transfer prices. A highlights the potential for internal conflict, while B points out the issue with negotiation skills disproportionately affecting evaluations.

Which of the Following Are Drawbacks Related to Negotiated Transfer