Question Details

Negotiated transfer prices are often employed 



1.	The benefits of a decentralized organization are greater when a company 
	a.	is large and unregulated.
	b.	is facing great uncertainties in their environment.
	c.	has few interdependencies among division.
	d.	is all of the above.

		
2.	A product may be passed from one subunit to another subunit in the same organization. The product is known as 
	a.	an interdepartmental product.
	b.	an intermediate product.
	c.	a subunit product.
	d.	a transfer product.

		
3.	Transfer prices should be judged by
	a.	whether they promote goal congruence.
	b.	whether they promote the balanced scorecard method.
	c.	whether they promote a high level of subunit autonomy in decision making.
	d.	both (a) and (c).


4.	A transfer-pricing method leads to goal congruence when
	a.	managers always act in their own best interest.
	b.	managers act in their own best interest and the decision is in the long-term best interest of the manager's subunit.
	c.	managers act in their own best interest and the decision is in the long-term best interest of the company.
	d.	managers act in their own best interest and the decision is in the short-term best interest of the company.


5.	Negotiated transfer prices are often employed when
	a.	market prices are stable.
	b.	market prices are volatile.
	c.	market prices change by a regular percentage each year.
	d.	goal congruence is not a major objective.





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