Discuss IMANET CMA Exam Topic 2 Question 35

Which of the following is the most significant disadvantage of a cost-based transfer price?

ARequires internally developed information

BImposes market effects on company operations.

CRequires externally developed information.

DMay not promote long-term efficiencies.

Suggested Answer: C, D

A cost-based transfer price is a price charged in an intracompany transaction that covers only the selling subunits costs. However, by ignoring relevant alternative market prices, a company may pay more than is necessary to produce goods and services internally.

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12 comments · newest first

Viva 11 months ago

B is a concern too, but not the biggest one.

Fletcher 12 months ago

Wait, how can D not promote long-term efficiencies? Sounds off.

Cherelle 12 months ago

Totally agree with A!

Viki 12 months ago

I think D is more significant.

Sarah 1 year ago

A is definitely a big issue.

Shoshana 1 year ago

I feel like option B could be relevant too, since market effects can really impact how a company operates, but I’m not confident about that.

Francisca 1 year ago

I’m a bit confused about whether requiring internally developed information is really a disadvantage. It seems like it could be both good and bad.

Rene 1 year ago

I remember a practice question that mentioned how cost-based pricing can lead to inefficiencies, so I’m leaning towards option D.

Eve 1 year ago

I think the biggest issue with cost-based transfer pricing is that it might not promote long-term efficiencies, but I'm not entirely sure.

Margery 1 year ago

Okay, I think I've got this. The key is to configure the tunnel interface with the right color on all three controllers. Option A looks like the way to go here.

Solange 1 year ago

I'm a bit confused by the wording of this question. Is "account current" the same as "account reimbursement"? I'll have to double-check the definitions to make sure I select the right answer.

Alida 1 year ago

For this setup, I'd recommend using LACP mode active. That way, the Nexus switches will actively negotiate the link aggregation with the servers.

IMANET CMA Exam - Topic 2 Question 35 Discussion