1
Q
Transfer price
A
price paid by one division to purchase goods or services from another
2
Q
What must be considered when setting the transfer price
A
- divisional autonomy
- allow profits
- group focussed
- clear, understandable and transparent
- arm’s length
3
Q
What may the transfer price based on
A
- market price
- marginal cost
- full cost
- cost plus margin
- negotiated price
4
Q
Which cost - standard or actual - should be used in transfer pricing?
A
Standard cost
5
Q
How do you calculate minimum acceptable transfer price?
A
Lost contribution method - the contribution lost by selling internally must be met by the internal orders and then add on the variable cost
6
Q
International transfer pricing objectives?
A
- tax planning
- less foreign exchange risks
- better competitive position
- better government relations
TC MIT
flashcards
Decks in class (18)
# Cards
-
Module 1 - Business Information6
-
Module 2- Classification of Costs29
-
Module 3 - Contribution9
-
Module 4 - Marginal Costing2
-
Module 5 - Limiting Factors6
-
Module 7 - Variance Analysis10
-
Module 8 - Forecasting6
-
Module 9 - Budgeting Techniques20
-
Module 10 - Overhead Accounting4
-
Module 11 - Absorption Costing13
-
Module 12 - Activity Based Costing5
-
Module 13 - Non-financial Performance Indicators11
-
Module 14 - Transfer Pricing6
-
Module 15 - Types of Information Systems23
-
Module 16 - Protecting Information16
-
Module 17 - Data Analytics11
-
Module 18 - Communication and Emerging Technologies6
-
Module 19 - Business Application of Technologies14
