JAMB Accounting 2017 Objective — Question 2

Question 2 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2017 Objective paper, with the correct answer and a full explanation.

When goods are sent to the branch at cost plus mark-up, it means that the branch should sell at

A. A. a price that is equal to the mark-up
B. B. any price but not below the transfer priceCorrect
C. C. a price above or below the stipulated price
D. D. no fixed price

Explanation

Goods sent at cost plus mark-up must not be sold below the mark-up (transfer) price, to avoid the branch making a loss.

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