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Which of the statements about transfer prices is true

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Reference no: EM132550987

Question 1: Which of the following statements about transfer prices is/are true?

i. When the producing division has excess capacity and the external market is imperfectly competitive, the general transfer-pricing rule and the external market price will be the same.

ii. If the transfer price is set at the market price, the supplying division will be indifferent to selling internally or externally.

iii. If the transfer price is set at the market price, the buying division will usually purchase goods from inside its organisation, if product specifications are met.

Reference no: EM132550987

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