The Market Price Is the Most Appropriate Transfer Price to Be

Multiple Choice

The market price is the most appropriate transfer price to be charged by one department to another in the same organization for a service provided when:

A) There is an external market for that service.
B) The selling department operates at 50 percent of its capacity.
C) The purchasing department has more negotiating power than the selling department.
D) There is no external market for that service.