Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 9, Problem 18MC
A transfer pricing arrangement that uses the price that would be charged to an external customer is a______.
A. market-based approach
B. negotiated approach
C. cost approach
D. decentralized approach
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Explain one advantage and one disadvantage of the following transfer pricing methods:
Cost
Market based
Negotiated
Explain the impact of the cost-volume-profit connection on pricing strategy.
Define transfer pricing and elaborate on FOUR (4) of its purposes.
B. In deciding a transfer pricing method, advise management on:i. negotiated transfer pricingii. market-based transfer pricing
C. Highlight ONE (1) advantage
Chapter 9 Solutions
Principles of Accounting Volume 2
Ch. 9 - Which of the following is nor a common goal of an...Ch. 9 - Which of the following does not describe a...Ch. 9 - In centralized organizations, primary decisions...Ch. 9 - A key advantage of a decentralized organization is...Ch. 9 - Strategic decisions occur ______. A. frequently...Ch. 9 - Segments are uniquely identifiable components of...Ch. 9 - Organizational charts _____. A. list the salaries...Ch. 9 - In a centralized organization, where are goals...Ch. 9 - Managers in decentralized organizations make...Ch. 9 - Which of the following is not a type of...
Ch. 9 - A system that establishes financial accountability...Ch. 9 - A responsibility center in which managers are held...Ch. 9 - A responsibility center structure that considers...Ch. 9 - An important goal of a responsibility accounting...Ch. 9 - Costs that a company or manager can influence are...Ch. 9 - An example of an uncontrollable cost would include...Ch. 9 - Internal costs that are charged to the segments of...Ch. 9 - A transfer pricing arrangement that uses the price...Ch. 9 - A transfer pricing structure that considers the...Ch. 9 - What is a management control system? What are its...Ch. 9 - Identify and describe the levels of management,...Ch. 9 - Discuss the difference between centralized and...Ch. 9 - Identity a company where you recently shopped....Ch. 9 - Discuss the difference between daily and strategic...Ch. 9 - Define segments and describe how identifying...Ch. 9 - Choose a company and describe how a specific...Ch. 9 - Choose a company and explain how a specific issue,...Ch. 9 - Assume you are the manager of a local Starbucks....Ch. 9 - Assume you are the manager of a local Starbucks....Ch. 9 - Lavell started out mowing lawns in the...Ch. 9 - Describe the concept of responsibility accounting.Ch. 9 - Describe the concept of a cost center and, using a...Ch. 9 - Describe the concept of a profit center and, using...Ch. 9 - Explain the benefits of a return on investment...Ch. 9 - Explain the benefits of a residual income...Ch. 9 - Discuss the concept of controllable and...Ch. 9 - Discuss the concept of transfer pricing.Ch. 9 - Discuss the advantages and disadvantages of a...Ch. 9 - Discuss the advantages and disadvantages of a...Ch. 9 - Discuss the advantages and disadvantages of a...Ch. 9 - Assume you have been hired by Hilton Hotels and...Ch. 9 - Consider the national nonprofit organization the...Ch. 9 - The following information is from Bluff Run Golf...Ch. 9 - The following information is from Daves Sporting...Ch. 9 - Assume you are the department B manager for...Ch. 9 - As manager of department B in MarIeys...Ch. 9 - Based on your research of the market in the...Ch. 9 - Using the information in the previous exercises...Ch. 9 - Assume you have been hired by Cabelas Sporting...Ch. 9 - Assume you are the regional manager for a hotel...Ch. 9 - The following information is from Dessert Dynasty....Ch. 9 - The following information is from Good Read Books....Ch. 9 - Assume you are the warehouse manager for Vinnies...Ch. 9 - As manager of the warehouse for Vinnies Vinyls,...Ch. 9 - Discuss how, as warehouse manager for Vinnies...Ch. 9 - Determine the operating income for Vinnies Vinyls...Ch. 9 - Use the following information to answer the...Ch. 9 - The income statement comparison for Forklift...Ch. 9 - Assume you are the leather department manager at...Ch. 9 - Financial information for BDS Enterprises for the...Ch. 9 - Using the information from BDS Enterprises,...Ch. 9 - Management of Great Springs Bottled Water Company...Ch. 9 - The following revenue data were taken from the...Ch. 9 - Use the following information to answer the...Ch. 9 - The income statement comparison for Rush Delivery...Ch. 9 - Assume you are the manager for the semi-trucks...Ch. 9 - Financial information for Lighthizer Trading...Ch. 9 - Using the information for Lighthizer Trading...Ch. 9 - Management of Green Peak Tea Company has asked...Ch. 9 - The following revenue data were taken from the...Ch. 9 - You have just been elected president of a...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A transfer pricing structure that considers the opportunity costs of selling to internal rather than external customers uses_______. A. the cost approach B. the general transfer pricing approach C. the market-based approach D. the opportunity cost approacharrow_forwardDiscuss the advantages and disadvantages of a market-based transfer pricing approach.arrow_forwardDiscuss the advantages and disadvantages of a cost-based transfer pricing approach.arrow_forward
- This transfer prices basis is considered to be the most inferior one a. variable cost transfer pice b. full cost transfer price c. negotiatied transfer price d. external market transfer price e. dual transfer pricearrow_forwardWhen is it more appropriate to use market-based transfer price rather than cost-based transfer price?arrow_forwardWhat is Transfer Pricing? What are the approaches in determining transfer prices? In your own idea, identify some best practices in transfer pricing.arrow_forward
- Which of the following is an advantage of using cost-based transfer prices? Multiple Choice Such prices are an objective measure and easy to compute. Such prices motivate the buying division to control cost. Such prices provide a sense of fairness. Such prices will usually exceed the market-based or negotiated transfer prices.arrow_forwardQ- 7: prices are needed? What is meant by Transfer price and why transfer Q- 8: opportunity cost, and sunk cost. Define the following terms: differential cost,arrow_forward1.arrow_forward
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