For the purpose of transfer pricing,any part of the organization to which revenue and controllable costs can be assigned,such as a department,is referred to as a:
A)sales department.
B)revenue center.
C)controllable costs center.
D)profit center.

Question

Quizplus · Accepted Answer

A profit center is a part of an organization to which revenue and controllable costs can be assigned, and it is used for transfer pricing purposes. This is because the profit center is responsible for generating profits, and it is therefore important to determine the appropriate transfer price for goods and services that are provided between different profit centers within the same organization. The other options (A, B, and C) do not accurately capture the concept of a profit center.

For the Purpose of Transfer Pricing,any Part of the Organization