A limitation of transfer prices based on actual cost is that they ?

Question

A. Charge inefficiencies to the department that is transferring the goods.

B. Can lead to suboptimal decisions for the company as a whole.

C. Must be adjusted by some markup.

D. Lack clarity and administrative convenience.

Mir Mujtaba Ali · Answer

B.Can lead to suboptimal decisions for the company as a whole

Mobeen Tahir · Answer

Option B is the right answer.

Mohammad Afzal Khan · Answer

D- lack clarity and administrative convenience

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN · Answer

Answer option >>>>>>>>>>> B. Can lead to suboptimal decisions for the company as a whole.