The primary objective in setting transfer prices is to _______

A) establish a system that determines the best transfer prices for the company as a whole

B) evaluate the managers of the responsibility centers involved

C) achieve goal congruence by selecting a price that will maximize overall company profits

D) make it easy for managers to select prices that maximize division profits

Expert Solution

The Primary Objective of setting Transfer Pricing is to achieve goal congruence by selecting a price that will maximize overall company profit.

The Correct Answer is C

D cannot be primary objective as it focus only on division

B is not the main reason for seting transfer pricing

A. Best Transfer Price is to be selected with ultimate goal of compamy as a whole

ekkarill92 answered 2 years ago

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