Asked by

Madison Burnett
on Oct 23, 2024

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In a divisional corporate organisation, an ideal inter-divisional transfer price should:

A) maximise the profits of the selling division.
B) maximise the profits of the corporation.
C) ensure goal congruence, divisional autonomy and motivation.
D) All of the given answers

Inter-Divisional Transfer Price

The price charged for goods or services exchanged between divisions of the same company.

Divisional Autonomy

The degree of independence granted to separate divisions within a company, allowing them to make decisions without central approval.

Goal Congruence

The alignment of individual goals with the overall objectives of the organization, essential for organizational effectiveness and motivation.

  • Understand the principles and applications of transfer pricing, including cost-plus and market-price policies.
  • Gain insight into how transfer pricing affects the profitability of both corporations and their divisions.
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DA
Daniella AlfonsoOct 25, 2024
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