A major problem facing company decision makers when setting transfer prices is:
A)how to determine the product-service attributes of the transfer.
B)when to complete the transfer.
C)how to assign the controllable costs to the profit centers.
D)what price to actually charge the receiving profit center.

Question

Quizplus · Accepted Answer

The main problem facing company decision makers when setting transfer prices is determining the appropriate price to charge the receiving profit center. This pricing decision can have a significant impact on the performance of the individual profit centers and the overall profitability of the company. Factors that need to be considered when setting transfer prices include the market price for the product or service, the cost of producing the product or service, and the impact on the performance of the receiving profit center.

A Major Problem Facing Company Decision Makers When Setting Transfer