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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Which approach to transfer pricing uses the price at which the product or service transferred could 1w sold to outside buyers?
A. Cost price approach
B. Negotiated price approach
C. Market price approach
D. Standard cost approach

To determine

Concept Introduction:

Transfer Price:

Transfer Price is a price at which one division of a company transfers its goods to another division of the same company.

To choose:

The correct option for the transfer pricing approach for the outsider

Explanation

Explanation for correct answer:

The Market Price approach is used for the transfer pricing for the outsider. Hence the correct option is C.

Explanation for incorrect answers:

A. The Market Price approach is used for the transfer pricing for the outsider...

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