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Vlad [161]
3 years ago
12

The CEO of Lexington decides to impose a transfer price since the two divisions cannot agree. She chooses the highest feasible p

rice. Her reasoning is that selling for a high price is better for Lexington's profit. Is the CEO's reasoning sound? Explain why or why not.
Business
1 answer:
Sloan [31]3 years ago
8 0

Answer: Not Sound as Company does not benefit as a Whole.

Explanation:

This question alludes to the presence of Divisions in a company tasked with producing different segments of a good.

One Division makes a segment of the good and transfers it for a price to the other division so that they may be able to show Revenue on their books.

The reasoning of the CEO of Lexington is flawed because if she chooses the highest feasible Transfer Fee for the goods it will be good for the Division doing the Transferring because they make more revenue.

However, it will increase the cost of those being transferred to by the same amount that it increase the revenue of the Division transferred from.

As a result, the increase in Cost and the Increase in Revenue in the two divisions will cancel each other out meaning that the company did not benefit.

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It may be required by law.
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6 0
2 years ago
Suppose the domestic price (without international trade) of copper is $1.20 per pound in the United States while the world price
Jlenok [28]

If  the world price is $1.00 per pound. Assuming the small-country model is applicable and no transportation costs, the United States will import copper.

<h3>What is import?</h3>

Import can be defined as the process of bringing in goods produce in another country into your own country so as to sale them in your own country.

Since the world price is $1.00 per pound and United states price is $1.20. If no transportation cost importing copper into United state will be the best choice as this will help to lower cost.

Therefore  assuming the small-country model is applicable and no transportation costs, the United States will import copper.

Learn more about import here:brainly.com/question/536549

4 0
2 years ago
An alternative approach to recording unearned revenue would be to ______ when cash is collected from a customer in advance of pr
ad-work [718]

Answer:

The correct response will be "Credit sales revenue".

Explanation:

  • Net credit sales would be costs that come by someone with an individual or attribute which enables on account receivables, minus the cost gross sales as well as sales pension contributions.
  • Net loan transactions don't include any transactions about which money changes hands in cashback rewards.

So that the above would be the correct approach.

6 0
3 years ago
Two characteristics of sociological minorities are _____ and _____.
inysia [295]
The answer is D.  Physical or cultural difference; subordination.
5 0
3 years ago
Joe is an 18 year old high school student. If there is a sharp rise in interest rates, which situation BEST reflects how Joe's l
Sever21 [200]

Answer: The correct answer is B) He might have to purchase a less-expensive car.

Explanation:

Increasing interest rates make the process of borrowing money less desirable. Since people usually borrow money for major purchases, the correct answer would be that <em>Joe might have to purchase a less-expensive car.</em> People often use credit to buy a car, and since all of the other options involve much less-expensive situations, we can determine that this is the correct answer.

8 0
4 years ago
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