CIMA Exam CIMAPRO19-P02-1 Topic 1 Question 17 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam

Question #: 17
Topic #: 1

It is often claimed that a two-part transfer pricing system offers a number of advantages to organizations which use it.

Which of the following statements is NOT an advantage of using a two-part transfer pricing system?

ATransfers are made at the marginal cost of the supplying division and both divisions should be able to report profits from inter-divisional trading.

BThe receiving division is made aware of and charged for the full cost of obtaining intermediate products from other divisions.

CIt stimulates planning, communication and coordination amongst divisions.

DThe agreed fixed fee simply compensates the supplying division for incurring the fixed costs associated with the item transferred.

Show Suggested Answer

Suggested Answer: D

by Quentin at May 07, 2022, 07:36 PM

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