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All of the Following Are Correct Statements About the Cost-Based

Question 49

Multiple Choice

All of the following are correct statements about the cost-based transfer price approach except that it


A) can understate the actual contribution to profit by the selling division.
B) can reduce a division manager's control over the division's performance.
C) bases the transfer price on standard cost instead of actual cost.
D) provides incentive for the selling division to control costs.

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