Question

Negotiated transfer prices ______. are consistent with decentralization use the expertise of managers in weighing the costs and benefits of the transfer ensure that the supplying division will receive a market price ensure that all common costs will be covered preserve the autonomy of the divisions

Answer 1

Answer:

1. are consistent with decentralization.

2. use the expertise of managers in weighing the costs and benefits of the transfer.

3. preserve the autonomy of the divisions.

Explanation:

A negotiated transfer prices can be defined as the final price reached between the buyer (consumer) of finished goods and services and the trader (seller) of such goods and services.

Negotiated transfer prices has the following advantages;

1. Negotiated transfer prices are consistent with decentralization.

2. Use the expertise of managers in weighing the costs and benefits of the transfer.

3. They preserve the autonomy of the divisions.