Your required answer is option C i.e. Dual Pricing
Explanation:
Transfer pricing method that reduces the goal congruence problems associated with a pure cost plus based transfer pricing method is called Dual Pricing.
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17. The transfer - pricing method that reduces the goal – congruence problems associated with a...
25. Which of the following is management’s challenge when setting transfer prices? a. Ensuring the buyer has goal congruence with respect to the organization’s goals. b. Ensuring the seller has goal congruence with respect to the organization’s goals. c. Ensuring either the buyer or the seller, but not both, has goal congruence with respect to the organization’s goals. d. Ensuring both the buyer and seller have goal congruence with respect to the organization’s goals. 26. Which of the following transfer pricing procedures...
Which of the following is not an advantage of decentralization: A. Potential problems achieving goal congruence B. Frees top management's time C. Encourages use of expert knowledge D. Improved motivation and retention
A transferminuspricing method leads to goal congruence when ________. A. there is a price difference in different markets due to market inefficiencies B. managers do not act for their own best interest and work for the longminusterm best interest of the manager's subunit C. there is a low degree of centralization D. managers act in their own best interest and the decision is in the longminusterm best interest of the company
Define Define (a)Negotiated transfer pricing method (b)Marketing based transfer pricing method Effect of each method on the divisional performance
Assess the major potential problems that a multinational firm could encounter when using negotiated transfer pricing instead of market-based transfer pricing. Provide one (1) recommendation to the firm on how to avoid these problems.
Should Minimizing Taxes Be the Only Goal of Transfer Pricing? POINT When the members of a corporate family, such as a parent corporation and subsidiary, are lo- cated in different countries, transfer pricing affects taxes owed, and, therefore, company profits. This makes transfer pricing a very large matter ofoperational importance, but also creates a sig- nificant corporate tax issue. Consider the following scenario: A company subsidiary is located in Country A, where the tax rate is 30 percent. The subsidiary...
D. Time-and-Material Pricing. 1. Under time-and-material pricing, the company sets two pricing rates a) i. ii. b) i. 2. Using time-and-material pricing involves three steps: a. b. c. 4. The charge for labor time is expressed as a rate per labor hour which includes: a b. c. 5. The charge for materials typically includes a material loading charge which covers the costs of: a. b. c. d. e. 6. The material loading charge is expressed as a percentage of the...
The following question presents hypothetical data concerning transfer of cotton between departments as part of the Cotton On Group's production processes. The textile department produces cotton for use by various other production departments within the Cotton On Group. The costs incurred by the textile department to produce cotton are provided below: Cost per square metre Direct materials $2.10 Direct labour $0.50 Variable overhead $0.25 Fixed overhead $0.15 The textile department can also sell cotton to external customers for $5.00 per...
1. The most popular method of pricing is _____ pricing. a. breakeven b. incremental-cost c. cost-plus d. full-cost 2. Prestige pricing objectives emphasize: a. cost minimization. b. quality and exclusivity. c. revenue maximization. d. sales maximization. 3. Global Diamond manufactures jewelry. This firm is planning to introduce a new necklace and is trying to determine how many units it must sell in order to break even. Fixed costs are $100,000 and variable costs for each unit will be $20. At...
1,3,5 then 9 through 16
Note: All asterisked Questions, Exercises, and Problems relate to material in the appendices to this chapter. Questions 1. What are the two types of pricing environments for sales to exter- nal parties? 2. In what situation does a company place the greatest focus on its target cost? How is the target cost determined? 3. What is the basic formula to determine the target selling price in cost-plus pricing? 4. Benz Corporation produces a filter that...