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A limitation of transfer prices based on actual cost is that they ?

A. Charge inefficiencies to the department that is transferring the goods.

B. Can lead to suboptimal decisions for the company as a whole.

C. Must be adjusted by some markup.

D. Lack clarity and administrative convenience.

Accounting Auditing CMA Banking
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Question added by Deleted user
Date Posted: 2015/03/19
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Mir Mujtaba Ali
by Mir Mujtaba Ali , Internal Audit Manager , Confidential

B.Can lead to suboptimal decisions for the company as a whole

Mobeen Tahir
by Mobeen Tahir , Credit Officer , Tawuniya Insurance

Option B is the right answer.

Mohammad Afzal Khan
by Mohammad Afzal Khan , Accountant , Almarai

D- lack clarity and administrative convenience

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Answer option >>>>>>>>>>> B. Can lead to suboptimal decisions for the company as a whole.

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