Which statement is true concerning negotiated transfer pricing?
A)It preserves the autonomy of the division managers.
B)It does not preserve the autonomy of the division managers.
C)It violates generally accepted accounting principles.
D)It is the same as centrally administered transfer pricing.

Question

Quizplus · Accepted Answer

Negotiated transfer pricing allows division managers to negotiate the transfer price between them, preserving their autonomy in decision-making. It is different from centrally administered transfer pricing, which is set by the central management. It is not a violation of generally accepted accounting principles, as it is a common practice in decentralized organizations.

Which Statement Is True Concerning Negotiated Transfer Pricing