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CIMAPRO19-P02-1 Exam - Topic 1 Question 10 Discussion

Which TWO of the following are reasons why cost-based approaches to transfer pricing are often used in practice?
C) Because the external market is imperfect. and D) Because there is often no external market for the product that is being transferred.
A) The buying division will want to maximize its profits.
B) The transferring division will want to maximize its profits.
E) The approach allows the organization to cover all the costs.

CIMAPRO19-P02-1 Exam - Topic 1 Question 10 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 10
Topic #: 1
[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 Carey at May 04, 2022, 07:15 PM

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Alfred
10 months ago
Totally agree with C and D! Makes perfect sense.
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Kiley
10 months ago
Wait, no external market? That seems odd...
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Lorrine
11 months ago
E is a good point too, covering costs is key!
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Brandon
11 months ago
I think A and B make more sense, though.
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Theodora
11 months ago
Definitely C and D! External markets can be tricky.
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Antonio
11 months ago
I'm not sure about this one. The question doesn't provide enough information about the network topology or the OSPF configuration. I'll need to think through the DR election process and make sure I understand the implications of the given information.
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Lorita
11 months ago
Okay, I've got a strategy for this. I'll focus on the key requirements - routing cases in the order they are submitted and getting them to the support team. I think the Case queues option might be the way to go here.
upvoted 0 times
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Denae
11 months ago
Wait, is this about expert judgment? I mean, they're making a decision based on their assessment of the situation, right? Or is that not quite what they're looking for here? I'm a little confused on how to categorize this one.
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