Decision Making Paper 9


A proposed transfer price may be a cost-plus price. Variable-cost-plus price is the price


A proposed transfer price may be based upon the full-cost price. Full-cost price is the price


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


Brent Co. has intracompany service transfers from Division Core, a cost center, to Division Pro, a profit center. Under stable economic conditions, which of the following transfer prices is likely to be most conducive to evaluating whether both divisions have met their responsibilities?


Pazer Inc produces portable televisions Pazer’s product manager proposes to increase the cost structure by adding voice-activated volume/channel controls to the television, and also adding three additional repair personnel to deal with products returned due to defects. Are these costs value-added or nonvalue-added?
Cost of Voice-Activated Controls
Cost of Additional Repair Personnel


Systematic evaluation of the trade-offs between product functionality and product cost while still satisfying customer needs is the definition of


Vince, Inc., has developed and patented a new laser disc reading device that will be marketed internationally. Which of the following factors should Vince consider in pricing the device?
I. Quality of the new device
II. Life of the new device
III. Customers’ relative preference for quality compared with price


The advantages of incorporating full product costs in pricing decisions include all the following except


Which one of the following situations best lends itself to a cost-based pricing approach?


Companies that manufacture made-to-order industrial equipment typically use which one of the following?


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