A major goal of transfer pricing is to motivate the decision maker to act in the organization's best interests.

Question

Quizplus · Accepted Answer

Transfer pricing is designed to provide incentives for decision makers to make choices that will benefit the organization as a whole, rather than just their individual departments or units. By setting transfer prices that reflect the true costs and values of goods and services within the organization, decision makers are encouraged to consider the impact of their choices on the overall financial performance and strategic goals of the company.

A Major Goal of Transfer Pricing Is to Motivate the Decision