In Comparing the Three Basic Approaches to Transfer Pricing, Which

Multiple Choice

In comparing the three basic approaches to transfer pricing, which of the following statements would be true?

A) A cost-based approach preserves subunit autonomy while negotiated transfer prices do not.
B) Market-based transfer pricing motivates managers but negotiated prices do not.
C) Cost-based transfer pricing systems are more difficult to implement and often make more time to implement than negotiated transfer pricing.
D) Market-based transfer pricing achieves goal congruence when markets are competitive while cost-based can achieve goal congruence, but not always.