COST ACCOUNTING
RESPONSIBILITY ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is an objective of transfer pricing?
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Motivation for managers
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Basis for rewarding managers
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Incentive for managers to make decisions consistent with the firm’s goals
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all of the given choices are objectives of transfer pricing
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Explanation:
Detailed explanation-1: -1) Maximizing overall after-tax profits. 3) Circumventing the quota restrictions (in value terms) on imports.
Detailed explanation-2: -The three main objectives of a domestic transfer pricing system are: (1) the attainment of goal congruence, (2) the facilitation of fair divisional performance evaluation and (3) the promotion of divisional autonomy.
There is 1 question to complete.