Which of the following is a consistently desirable characteristic in a transfer pricing system?
A)system is very complex to be the most fair to the buying and selling units
B)effect on subunit performance measures is not easily determined
C)system should reflect organizational goals
D)transfer price remains constant for a period of at least two years

Question

Quizplus · Accepted Answer

A desirable characteristic of a transfer pricing system is that it should align with the organizational goals, i.e., it should promote goal congruence. Option A contradicts the concept of fairness, which is also a desirable characteristic. Option B is not desirable as it may create conflicts between subunits and may result in suboptimal decision-making. Option D is not a consistent desirable characteristic, as transfer prices may need to be adjusted based on changes in market conditions.

Which of the Following Is a Consistently Desirable Characteristic in a Transfer