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Part $1$

$"$Transfer pricing is confined to profit$$ centers." Do you$$ agree? Explain.

Question content area bottom

Part $1$

A$.$

Yes. Profit centers are the only ones that have to consider the opportunity cost of selling outside the organization

B$.$

No$.$ A transfer price is the price one subunit of an organization charges for a product or service supplied to another subunit of the same organization. The two segments must be investment centers.

C$.$

No$.$ A transfer price is the price one subunit of an organization charges for a product or service supplied to another subunit of the same organization. The two segments can be cost$$ centers, profit$$ centers, or investment centers.

D$.$

No$.$ A transfer price is the price one subunit of an organization charges for a product or service supplied to another subunit of the same organization. The two segments must be cost centers.