Negotiable range of transfer pricing between selling and purchasing division shall be minimum price at which the selling division is ready to sell and maximum price at which the purchasing division is ready to purchase the products.
Requirement 1:
The Decision of purchasing the batteries from outside or manufacture in house shall be determined.
Requirement 2:
The maximum transfer price for which the purchasing division accept the deal shall be determined.
Requirement 3:
The Minimum price at which the Battery division is ready to transfer shall be determined, when the excess capacity exists.
Requirement 4:
The minimum price at which the battery division is ready to transfer shall be determined, when excess capacity does not exist.
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Horngren's Accounting, The Financial Chapters (11th Edition) - Standalone Book
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