COST ACCOUNTING
16th Edition
ISBN: 9781323694008
Author: Horngren
Publisher: PEARSON C
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Question
Chapter 22, Problem 22.13Q
To determine
Transfer Price:
This is a price which is charged by one sub-unit of an organization to another sub-unit for supplying a product or service in the same organization.
To explain: Whether the cost and price information play no role in negotiated transfer prices.
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“Cost and price information play no role in negotiated transfer prices.” Do you agree? Explain.
When is it more appropriate to use market-based transfer price rather than cost-based transfer price?
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 profit
Chapter 22 Solutions
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 - Evaluating management control systems, balanced...Ch. 22 - Cost centers, profit centers, decentralization,...Ch. 22 - Prob. 22.18ECh. 22 - Prob. 22.19ECh. 22 - Multinational transfer pricing, effect of...Ch. 22 - Prob. 22.21ECh. 22 - Multinational transfer pricing, global tax...Ch. 22 - Prob. 22.23ECh. 22 - Prob. 22.24ECh. 22 - Transfer-pricing problem (continuation of 22-24)....Ch. 22 - Prob. 22.26PCh. 22 - Prob. 22.27PCh. 22 - Effect of alternative transfer-pricing methods on...Ch. 22 - Goal-congruence problems with cost-plus...Ch. 22 - Multinational transfer pricing, global tax...Ch. 22 - Transfer pricing, external market, goal...Ch. 22 - Prob. 22.32PCh. 22 - Transfer pricing, goal congruence, ethics. Cocoa...Ch. 22 - Prob. 22.34PCh. 22 - Transfer pricing, perfect and imperfect markets....Ch. 22 - Prob. 22.36PCh. 22 - Prob. 22.37P
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Similar questions
- If an outside, perfectly competitive market exists for the intermediate product, what should the transfer price be? Why?arrow_forwardDiscuss the advantages and disadvantages of a negotiated transfer pricing approach.arrow_forwardThis 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_forward
- Calculate the lowest acceptable transfer price for the seller (Division A) ?arrow_forwardThe three common approaches to setting transfer prices include: the _____ price approach, where the transfer price is the price at which the product or service transferred could be sold to outside buyers; the _____ price approach allows the managers to agree among themselves on a transfer price; and the _____ price approach, where cost is used to set transfer prices. cost; market; negotiated market; cost; negotiated market; negotiated; cost negotiated; market; cost none of the abovearrow_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
- Which of the following transfer price approaches is used when the transfer price is set at the amount sold to outside buyers? a. variable price b. cost price c. negotiated price d. market pricearrow_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_forwardExplain how the lower of cost and net realizable value rule is applied to purchase commitments.arrow_forward
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