intitative Problem: Andrews Corporation has income from operat

1.  why companies need to transfer price and advantages? 2. explain the transfer pricing method that is used / can be used in this company. Explain the advantages and disadvantages?

Which of the following describes one aspect of incremental analysis? O Both costs and revenues that stay the same between alternate courses of action will be analyzed. O Only costs relating to the decisions at hand are analyzed. O All costs and revenues, regardless if they stay the same or differ between alternate courses of action, will be analyzed. O Both costs and revenues that differ between alternate courses of action will be analyzed.

C. Highlight ONE (1) advantage and ONE (1) disadvantage of the market-based transfer pricing method.

Should a company allow the owners to use the resources as they see fit?

The three common approaches to setting transfer prices include: the _____ price approach, where the transfer price is the price at which the product or service transferred could be sold to outside buyers; the _____ price approach allows the managers to agree among themselves on a transfer price; and the _____ price approach, where cost is used to set transfer prices. cost; market; negotiated market; cost; negotiated market; negotiated; cost negotiated; market; cost none of the above

Briefly discuss how differentiated products in a monopolistic competitive framework can arise.

From a decision-making point of view, should joint costs be allocated among joint products?

What are the disadvantages of outsourcing? (BUY)

Which is the best description of a dual transfer price?   A)  The receiving division is charged the market value of the item transferred while the supplying division is credited with the standard variable cost B)  The receiving division is credited the market value of the item transferred while the supplying division is charged with the standard variable cost C)  The receiving division is charged the standard variable cost transferred while the supplying division is credited with the market value of the item D)  The receiving division is credited the standard variable cost transferred while the supplying division is charged with the market value of the item