A Common Problem Associated with Transfer Pricing Occurs When

Multiple Choice

A common problem associated with transfer pricing occurs when

A) a division purchases inputs for processing from an outside source at a price higher than the internal transfer price.
B) the gross margin pricing method is used to compute the price.
C) a division sells its excess output to an external customer.
D) managers do not agree with the transfer prices of the inputs provided to them or of the outputs of their own division.