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

Q: nother cost-based approach to pricing is called time and material pricing. Under this approach, two…

A: Answer: Some companies--partiicularly in service industries-- use a variiation of cost and pricing…

Q: explain how sunk costs create a barrier to entry into the market place.

A: Sunk costs are expenses that can not be retrieved if a corporation wishes to leave a market.

Q: Which of following is a disadvantage of outsourcing

A: “The deliberate use of outside services to conduct tasks typically performed by internal personnel…

Q: “Cost and price information play no role in negotiated transfer prices.” Do you agree? Explain.

A: Disagree with the statement “Cost and price information play no role in negotiated transfer prices”.

Q: The primary objective of a transfer pricing system/scheme/policy is to motivate segment managers to…

A: internal transfer can be between the division or between the related companies.

Q: Define predatory pricing, dumping, and collusive pricing.

A: Target Costing:Target costing refers to the cost that is ascertained as per the needs and wants of…

Q: Explain how the lower of cost and net realizable value rule is applied to purchase commitments.

A: Purchase Commitments: It refers to the commitments or contract made by a company with its suppliers…

Q: Using the concept of substitution and income effect, explain why means-tested transfer programs…

A: The income effect  is basically the shift in consumer consumption of items as a result of  income…

Q: Identify the relative advantages and disadvantages of basing transfer prices on total costs,…

A:

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: "ABC systems may result in misallocation of indirect costs." Do you agree? Give reasons for your…

A: ABC system means Activity Based Costing system in which all indirect costs or overhead costs are…

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: Calculate the lowest acceptable transfer price for the seller (Division A) ?

A: Calculation of contribution per unit of Division A Particulars Amount Selling price per unit 76…

Q: The lower-of-cost-or-market rule can be applied to which of the following?

A: The lower of cost or market rule can be applied on the following: 1. Major classes or categories of…

Q: According to our authors, explain the concept of “lower-of-cost-or-market.”

A: When a company prepares its financial statement, it reports certain items in the financial statement…

Q: Given the weaknesses of cost-based pricing, why wouldany company use this method?

A: Cost-based pricing means setting prices based on the cost of goods and services.  The major…

Q: Describe and apply the lower-of-cost-or-market rule.

A: Cost:   It is the economic value incurred by an organization to produce a product or render a…

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: Why is the dual-rate charging method better than the single-rate method? In what circumstances would…

A: The dual rate cost allocation approach in cost accounting divides costs into two types of cost…

Q: Give an example on the Sell or process further and solve it

A: Sell or process further is a Managerial decision taken by considering factors like cost, sales…

Q: Explain one advantage and one disadvantage of the following transfer pricing methods: Cost Market…

A: first let us understand each of these methods briefly: Cost Method - Under this method goods are…

Q: How does capacity affect transfer pricing decisions?

A:

Q: ANSWER TRUE OR FALSE   Transfer prices can be used to promote goal congruence among operating…

A: Let's understand some basics  Transfer pricing is an accounting practice that represents the price…

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: Understand and apply the lower-of-cost-or-market rule.

A: Cost: It is the economic value incurred by an organization to produce a product or render a service.

Q: B. In deciding a transfer pricing method, advise management on: i. negotiated transfer pricing ii.…

A: Transfer pricing is the price which is to be calculated if there is any transaction between related…

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: A cost - based transfer price considers the cost of producing the goods when determining the price.…

A: At the time of determining the prices of the goods, the cost of goods-producing is required to be…

Q: Why is transfer pricing such a contentious issue?

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

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: if we produce goods over the capacity, should we consider the fixed marketing cost and variable…

A: Fixed marketing costs is fixed costs related with the marketing of the product and this will not be…

Q: The three common approaches to setting transfer prices include: the _____ price approach, where the…

A: There are three approaches, cost, market and negotiated.

Q: Explain the importance of the excess-capacity issue in setting a competitive bid price.

A:

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: 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: What are the three methods for determining transfer prices?

A: