Use the following information of the Toro division of Hondo Corporation to answer the next question(s):
Total divisional assets are $800,000. The firm's minimum required rate of return is 10%.
-A transfer price exists when two segments of the same organization
A) sell a product to the same customer.
B) sell a service to each other.
C) sell a product in a foreign country.
D) sell the same service to competitors.

Question

Use the following information of the Toro division of Hondo Corporation to answer the next question(s):
  Total divisional assets are $800,000. The firm's minimum required rate of return is 10%.
-A transfer price exists when two segments of the same organization
A) sell a product to the same customer. 
B) sell a service to each other. 
C) sell a product in a foreign country. 
D) sell the same service to competitors.

Quizplus · Accepted Answer

A transfer price exists when two segments of the same organization sell a service or a product to each other.

Use the Following Information of the Toro Division of Hondo