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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. Lack clarity and administrative convenience.
C. Must be adjusted by some markup.
D. Can lead to suboptimal decisions for the company as a whole.
Answer: D
Explanation:
The optimal transfer price of a selling division should be set at a point that will have the most desirable economic effect on the firm as a whole while at the same time continuing to motivate the management of every division to perform efficiently. Setting the transfer price based on actual costs rather than standard costs would give the selling division little incentive to control costs.

NEW QUESTION: 2
The /test1 filesystem was built larger than required. An effort to shrink the filesystem was made, but the resulting filesystem size is larger than the size specified. Given the following output, what is the most likely reason?

A. Amount of data in the filesystem
B. The physical partition size
C. Volume group status
D. Fragmentation of the filesystem
E. Options chosen with the df command
Answer: B

NEW QUESTION: 3
What is the only data format permitted with the SOAP API?
A. XSML
B. SAML
C. HTML
D. XML
Answer: D
Explanation:
The SOAP protocol only supports the XML data format.


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