Question

Select all that apply Transfer prices: (Check all that apply.) Multiple select question. are not used in investment centers. are prices charged to outside customers. are transfers within the same company. have a direct impact on division profits. have a direct impact on the company's overall profits.

Answer 1

Answer:

B. are transfers within the same company.

C. have a direct impact on division profits.

Explanation:

Transfer prices can be defined as the amount of money (prices) that is being charged by a division in a business firm for the goods and services provided to another division within the same business firm. Thus, the output of the selling division automatically becomes the input of the buying or receiving division.

The characteristics of transfer prices includes;

I. Are transfers within the same company.

II. Have a direct impact on division profits.

Answer 2

Transfer prices are transfers within the same company and have a direct impact on division profits.

The following information should be considered:

• It is to be defined the amount of money i.e. to be charged from the division for the goods & services that are provided to the other division but the business firm is same.
• The result of the selling division should automatic input for the division i.e. received.

Therefore we can conclude that the above options are considered.

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