Question: LEARNING ACTIVITIES Answer the following briefly: How is performance in a cost center generally measured? Performance in a profit center? Performance in an investment center?

LEARNING ACTIVITIES

Answer the following briefly:

  1. How is performance in a cost center generally measured? Performance in a profit center? Performance in an investment center?
  2. Distinguish between a cost center, a profit center, and an investment center.
  3. Define the term transfer price, and why are transfer pricing systems needed?
  4. If a market price for a product is determinable, why is it considered to be the best transfer price?
  5. Under what situation might a negotiated price be a better approach to pricing transfer between divisions than the actual market price.

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