This transfer prices basis is considered to be the most inferior one a. variable cost transfer pice b. full cost transfer price c. negotiatied transfer price d. external market transfer price e. dual transfer price

This transfer prices basis is considered to be the most inferior one a. variable cost transfer pice b. full cost transfer price c. negotiatied transfer price d. external market transfer price e. dual transfer price

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 18MC: A transfer pricing arrangement that uses the price that would be charged to an external customer is...

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Question

This transfer prices basis is considered to be the most inferior one

a. variable cost transfer pice

b. full cost transfer price

c. negotiatied transfer price

d. external market transfer price

e. dual transfer price

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Similar questions

A transfer pricing structure that considers the opportunity costs of selling to internal rather than external customers uses_______. A. the cost approach B. the general transfer pricing approach C. the market-based approach D. the opportunity cost approach
Select Among the choices, this transfer prices basis is considered as the most inferior one: a. variable cost transfer pice b. full cost transfer price c. negotiatied transfer price d. external market transfer price e. dual transfer price
Which of the following transfer price approaches is used when the transfer price is set at the amount sold to outside buyers? a. variable price b. cost price c. negotiated price d. market price
Determining the transfer price as the price at which the product or service transferred could be sold to outside buyers is known as the Oa. cost price approach Ob. negotiated price approach Oc. market price approach Od. revenue price approach
C. Highlight ONE (1) advantage and ONE (1) disadvantage of the market-based transfer pricing method.
When is it more appropriate to use market-based transfer price rather than cost-based transfer price?
The three common approaches to setting transfer prices include: the _____ price approach, where the transfer price is the price at which the product or service transferred could be sold to outside buyers; the _____ price approach allows the managers to agree among themselves on a transfer price; and the _____ price approach, where cost is used to set transfer prices. cost; market; negotiated market; cost; negotiated market; negotiated; cost negotiated; market; cost none of the above
In a transfer pricing decision, which of the following factors should be considered? Both A and B None of the above Market price and cost Negotiation and target profit
2. Transfer prices can be based on any of the following methods except a)variable cost b)replacement cost c)negotiated price between selling and buying divisions d)external market price e)variable and fixed costs
A cost - based transfer price considers the cost of producing the goods when determining the price. True False
What is one potential limitation of full-cost-based transfer prices?
Discuss the advantages and disadvantages of a market-based transfer pricing approach.