Oracle Financial Reporting and Analysis Cloud 2017 Implementation Essentials — Question 12

You are implementing Project Portfolio Management for a global professional services organization. In their Consulting Services line of business, it is common to use resources from different business units based on the skills required. Therefore, cross-charge transactions happen between business units within the same legal entity. Transfer price calculations need to be based on raw costs, with no further adjustments to transfer price.
Identify two setups that can drive this borrowed and lent agreement. (Choose two.)

Answer options

• A. Transfer price basis must be Raw Cost and calculation method must be Basis Only.
• B. Transfer price basis must be Burdened Cost, and calculation method must be Burden Rate Schedule.
• C. A document entry such as straight time must be enabled for cross-charge transactions.
• D. Transfer price basis must be Raw Cost and calculation method must be Rate Schedule.

Correct answer: B, C

Explanation

The correct answers are B and C because the transfer price must be based on Burdened Cost for accurate cost allocation, and enabling a document entry like straight time is essential for facilitating cross-charge transactions. Options A and D are incorrect since they do not align with the requirement for the transfer price to be based solely on raw costs or the necessary calculation method.