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CIMA Exam CIMAPRO19-P02-1 Topic 8 Question 100 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 100
Topic #: 8
[All CIMAPRO19-P02-1 Questions]

Which TWO of the following are reasons why cost-based approaches to transfer pricing are often used in practice?

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Suggested Answer: C, D

by Lorenza at Sep 16, 2024, 06:22 AM

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Haydee
5 months ago
I'm putting my money on C and D. The external market is a mess, and without any other options, cost-based is the way to go. Keeps the accountants happy, at least!
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Makeda
3 months ago
It's all about covering costs and keeping the accountants satisfied.
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Thora
3 months ago
Cost-based approaches are definitely more reliable when there's no external market.
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Larue
3 months ago
I agree, the external market can be unreliable.
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Raina
5 months ago
Haha, the transferring division wants to maximize profits? Good luck with that! But in all seriousness, C and D are the clear winners here. Can't argue with the logic.
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Francine
5 months ago
I'm going with B and D. The transferring division wants to maximize profits, and without an external market, cost-based is the logical choice. Gotta keep everyone happy, am I right?
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Alease
5 months ago
Definitely C and D. The external market can be messy, and if there's no external option, cost-based is the way to go. Keeps things simple, you know?
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Emerson
4 months ago
Agreed, it's a practical solution to avoid complications.
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Carlton
4 months ago
Exactly, cost-based approaches make sense in those situations.
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Twila
4 months ago
Cost-based approaches definitely simplify things when there's no other option.
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Lachelle
4 months ago
It's true, the external market can be unreliable, so relying on costs makes sense.
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Albina
4 months ago
D) Because there is often no external market for the product that is being transferred.
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Mozell
4 months ago
C) Because the external market is imperfect.
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Carmela
5 months ago
I agree, using cost-based approaches can help when there's no external market for the product.
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Rosann
5 months ago
But what about the external market being imperfect? Doesn't that play a role too?
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Marcos
5 months ago
I agree with that. It makes sense for them to use cost-based approaches.
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Elenora
5 months ago
I think the transferring division will want to maximize its profits.
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Estrella
5 months ago
I think C and D are the correct answers. The external market is often imperfect, and there is frequently no external market for the transferred product, so cost-based approaches make the most sense in those situations.
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Nohemi
5 months ago
Yes, it makes sense to use cost-based approaches when there is no external market for the product being transferred.
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Corrie
5 months ago
I agree, C and D are the reasons why cost-based approaches are often used.
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