Chapter 2 - Performance Evaluation

Question 1

Objectives of Transfer Pricing

Answer 1

1. Resource All- optimum manner -
2. Promote - Goal congruence
3. Motivate - Div Managers
4. Facilitate - Assesment of Mgmt Perf
5. Retain - Div Autonomy

Question 2

Objectivity of Divisional Profitability

Answer 2

1. Provide- info- econ decisions
2. Facilitate the control of division operations
3. Motivate Managers- high levels - div perf
4. Serve- basis - eval perf