Transfer Pricing

Multiple Choice

Transfer pricing

A) is a concept readily accepted by managers of divisions,because it relies on concepts used in cost-based pricing methods.
B) incorporates procedures that allow for ease in determining the amount of profit associated with each division of a decentralized company.
C) involves determining the cost and profit if the output of one division is transferred to another division of the same company.
D) is not used by many companies because it is difficult to eliminate intercompany profits.