NEW MyLab Accounting with Pearson eText -- Access Card -- for Cost Accounting
15th Edition
ISBN: 9780133451474
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Question
Chapter 22, Problem 22.12Q
To determine
Transfer Pricing:
This refers to a process of pricing in which one sub-unit of an organization charges a price to another sub-unit for supplying a product or service to the sub-unit of the same organization.
To explain: The two reasons because of which dual-pricing system of transfer pricing is not widely used.
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Students have asked these similar questions
Give two reasons why transfer pricing's dual-pricing scheme isn't frequently implemented.
“Transfer pricing is confined to profit centers.” Do you agree? Explain.
Explain one advantage and one disadvantage of the following transfer pricing methods:
Cost
Market based
Negotiated
Chapter 22 Solutions
NEW MyLab Accounting with Pearson eText -- Access Card -- for Cost Accounting
Ch. 22 - Prob. 22.1QCh. 22 - Describe three criteria you would use to evaluate...Ch. 22 - What is the relationship among motivation, goal...Ch. 22 - Name three benefits and two costs of...Ch. 22 - Organizations typically adopt a consistent...Ch. 22 - Transfer pricing is confined to profit centers. Do...Ch. 22 - What are the three methods for determining...Ch. 22 - What properties should transfer-pricing systems...Ch. 22 - All transfer-pricing methods give the same...Ch. 22 - Prob. 22.10Q
Ch. 22 - Prob. 22.11QCh. 22 - Prob. 22.12QCh. 22 - Prob. 22.13QCh. 22 - Under the general guideline for transfer pricing,...Ch. 22 - How should managers consider income tax issues...Ch. 22 - Prob. 22.16ECh. 22 - Prob. 22.17ECh. 22 - Prob. 22.18ECh. 22 - Prob. 22.19ECh. 22 - Prob. 22.20ECh. 22 - Prob. 22.21ECh. 22 - Prob. 22.22ECh. 22 - Prob. 22.23ECh. 22 - Prob. 22.24ECh. 22 - Prob. 22.25ECh. 22 - Prob. 22.26ECh. 22 - Prob. 22.27PCh. 22 - Prob. 22.28PCh. 22 - Prob. 22.29PCh. 22 - Prob. 22.30PCh. 22 - Prob. 22.31PCh. 22 - Prob. 22.32PCh. 22 - Prob. 22.33PCh. 22 - Prob. 22.34PCh. 22 - Prob. 22.35PCh. 22 - Prob. 22.36P
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Similar questions
- Discuss the advantages and disadvantages of a negotiated transfer pricing approach.arrow_forwardDiscuss the advantages and disadvantages of a cost-based transfer pricing approach.arrow_forwardIf an outside, perfectly competitive market exists for the intermediate product, what should the transfer price be? Why?arrow_forward
- 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 profitarrow_forward“Cost and price information play no role in negotiated transfer prices.” Do you agree? Explain.arrow_forwardExplain and critically assess the general idea behind transfer pricing. Would it be beneficial for allcompanies? Why?arrow_forward
- 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 pricearrow_forwardWhat is Transfer Pricing? What are the approaches in determining transfer prices? In your own idea, identify some best practices in transfer pricing.arrow_forwardSelect 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 pricearrow_forward
- When is it more appropriate to use market-based transfer price rather than cost-based transfer price?arrow_forwardExplain the objectives of transfer pricing and describe the advantages anddisadvantages of various transfer pricing alternatives.arrow_forwardExplain how negotiation between the supplying and buying units may be used to set transfer prices. How does this relate to the general transfer pricing rule?arrow_forward
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