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

Q: What are the optimal prices and profits for pure bundling.

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

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: 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: 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 economic analysis we want to minimize the difference: (Benefits - Costs).

A: While conducting an economic analysis (cost-benefit analysis) the benefits must weigh greater than…

Q: What are the calculation formulas for transfer pricing?

A: There are many methods for determining the transfer price. Most businesses actually set the transfer…

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: 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: Define the term make-or-buy (or outsourcing) analysis?

A: Make or buy: purchasing of goods from the outside vendors is called outsourcing.

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: 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: Under what conditions is a market-based transfer price optimal?

A:

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: Why can cost benefit analysis be difficult to carry out?

A: Introduction: Cost benefit analysis can be defined as a process which is undertaken by an…

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: Explain CMO Price Behavior and Prepayment Rates?

A: The question is based on the concept of Collateralized Mortgage Obligations (CMO) , interest rate…

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: “Under the general guideline for transfer pricing, the minimum transfer price will vary depending on…

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

Q: 1. “Transfer pricing is confined to profit centres”. Do you agree? Why?

A: Hi student Since there are multiple questions, we will answer only first question. If you want…

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: 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 purchasing power parity? How might afirm use this concept in its operations?

A: The question is based on the concept of equilibrium exchange rate in forex market, Purchasing power…

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

A:

Q: Why do you think that having a price structure important?

A: Pricing strategies are the methods companies use to price products and services. Almost all…

Q: What is Transfer Pricing? What are the approaches in determining transfer prices? In your own…

A: Explanation of transfer pricing and approaches determining transfer pricing are as follows.

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: 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: Explain advantages of Centralization and advantages of De-Centralization in terms of economic…

A: Centralization is the process of making all the relevant decisions from the central authority. The…

Q: gross margin for FPD if it accepted the transfer price

A: Variable costs P400,000 Fixed costs P100,000 Total cost (A) P500,000 Total number of units…

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

A: Please find the answers to the above questions below:

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…

Q: Explain the behavioral problem that can result when cost-plus prices are based on variable cost.

A: Following is the answer to the given question