Which of the following describes the goal that should be pursued when setting transfer prices?
A. Allow top management to become actively involved when calculating the proper dollar amounts.
B. Maximize profits of the selling division.
C. Establish incentives for autonomous division managers to make decisions that are in the overall organization's best interests (i.e., goal congruence).
D. Maximize profits of the buying division.
E. Minimize opportunity costs.
Answer: C
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