If it is particularly difficult for the corporate headquarters to determine the correct transfer price
A)average costs is a good enough approximation
B)average variable costs is a good enough approximation
C)a similar products market price is a good enough approximation
D)the upstream division could be run as a cost center

Question

Quizplus · Accepted Answer

Running the upstream division as a cost center allows it to focus on minimizing costs rather than setting transfer prices, which can be complex to determine accurately.

If It Is Particularly Difficult for the Corporate Headquarters to Determine