Question Details

Market-based transfer prices are ideal in perfectly competitive 




TRUE/FALSE
1.	The prices negotiated by two divisions of the same company usually have no specific relationship to either costs or market price.

	
2.	Opportunity costs represent the cash flows directly associated with the production and transfer of the products and services.

	
3.	Market-based transfer prices are ideal in perfectly competitive markets when there is idle capacity in the selling division.

	
4.	If the product sold between divisions has no intermediate market, the opportunity cost of supplying the product internally is the variable cost of the product.

5. 	Additional factors that arise in multinational transfer pricing include tariffs and customs duties levied on imports of products into a country.




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