Reference no: EM132666314

Problem 1: Under the _____, the transfer price is the price at which the product or service transferred could be sold to outside buyers.

a. negotiated price approach

b. DuPont approach

c. market price approach

d. cost approach

Problem 2: Since investment center managers have the responsibility and the authority to make decisions that affect not only costs and revenues, but also the assets invested in the center, _____ is used as a performance measure to evaluate their performance.

a. unearned income

b. unearned revenue

c. deferred tax

d. residual income