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A limitation of transfer prices based on actual cost is that they:
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B. Lack clarity and administrative convenience.
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D. Charge inefficiencies to the department that is transferring the goods.
Answer: C
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.

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Answer: E

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


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