Explain one advantage and one disadvantage of the following transfer pricing methods: Cost Market based Negotiated

Q: how does the contribution margin pricing method differ from ratio pricing method?

A: The question is based on the concept of pricing policy and methods. The product's price can be…

Q: Under what conditions is a market-based transfer price most likely to be used?

A: Transfer Pricing: It is termed as the cost which is charged by the one department of the company…

Q: What is a transfer price? What are the three main approaches to setting transfer prices?

A: Transfer pricing:   Transfer pricing refers to the setting of prices for goods and services that are…

Q: In the Gold Blue Company, Division A has a product that can be sold either to outside customers or…

A: Note: As per general rule, in the case of sufficient capacity available, the minimum transfer price…

Q: Cost-volume-profit analysis favors either variable costing or absorption costs. Why?

A: The CVP analysis is used to analyse the impact of changes in variable cost and fixed cost on net…

Q: In a transfer pricing decision, which of the following factors should be considered?    Both A and B…

A: Transfer pricing refers to the pricing strategy and decisions made within transnational companies…

Q: Q 7: prices What is meant by Transfer price and why transfer are needed?

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Give two reasons why transfer pricing's dual-pricing scheme isn't frequently implemented.

A: This question explains about the transfer pricing's dual-pricing scheme is frequently implemented.

Q: “Transfer pricing is confined to profit centers.” Do you agree? Explain.

A:

Q: Determining the best approach to pricing requires a cost-benefit trade-off. Explain.

A: The best approach to pricing requires the cost benefit trade-off is explained as below, The Best…

Q: Which of the following is an advantage of using cost-based transfer prices? Multiple Choice Such…

A: Cost based transfer pricing is a costing method where the selling cost of the product is based on…

Q: Describe three limitations of the economic, profitmaximizing model of pricing.

A: Profit maximizing price: The price for which the relative quantity is identified by the intersection…

Q: What is the primary disadvantage of basing the costplus pricing formula on absorption cost?

A: Definition: Cost plus-pricing approach: The pricing approach used by the companies to set the target…

Q: What are the advantages and disadvantages of target pricing versus cost-based pricing?

A: Advantages of target pricing are as follows: It help in controlling in cost It provide profit with…

Q: This transfer prices basis is considered to be the most inferior one a. variable cost transfer pice…

A: The concept market transfer price is more associated with transfer price in method that sells the…

Q: Why is there often a conflict between the performance evaluation and cost-minimization objectives of…

A: SOLUTION- TRANSFER PRICING   IS THE ACCOUNTING PRACTICE THAT REPRESENTS THE PRICE THAT ONE DIVISION…

Q: Select Among the choices, this transfer prices basis is considered as the most inferior one: a.…

A: Two or more departments of a company or interrelated companies or enterprises may transfer their…

Q: Give two reasons why the dual-pricing system of transfer pricing is not widely used.

A:

Q: Explain the impact of the cost-volume-profit connection on pricing strategy.

A: The cost volume profit analysis analyse the impact of the variable cost and fixed cost on the…

Q: What difficulties do you see in using a full-cost transfer-pricing system in the future?

A: Transfer Pricing: This refers to a process of pricing in which one sub-unit of an organization…

Q: What is one potential limitation of full-cost-based transfer prices?

A: Full cost based transfer pricing means transfer price based on total product cost per unit which…

Q: What is meant by Transfer price and why transfer prices are needed? 2- Distinguish between Traceable…

A: Meaning of Transfer Price, Traceable and Common cost is given below,

Q: C. Highlight ONE (1) advantage and ONE (1) disadvantage of the market-based transfer pricing method.

A: Under market based Transfer pricing, the tranfer price between one divison to another divison under…

Q: When is it more appropriate to use market-based transfer price rather than cost-based transfer…

A: Transfer pricing:- Its the price at which one unit of a company sells goods to its another unit.…

Q: Explain the objectives of transfer pricing and describe the advantages anddisadvantages of various…

A: Transfer pricing in tax and accounting relates to the laws and procedures for the selling/buying…

Q: One element of the general transfer-pricing rule is opportunity cost. Briefly define the term…

A: Opportunity cost is the benefit foregone from choosing the next best alternative in a decision…

Q: Explain why using cost as a transfer price is inappropri-ate when the center producing the product…

A: Profit Center: A profit center may be a part of a business that is expected to form an identifiable…

Q: Identify three cost-based transfer prices. What are the disadvantages of cost-based transfer prices?…

A: Transfer Pricing: It is the value at which goods and services are transferred from one unit to…