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Transfer_Pricing_notes - b Cost-Based • Variable Cost •...

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Transfer Pricing – the price charged when one division (buying division) buys from another division (selling division) within the same company. 1. Impact on Division vs. Impact on Company as a whole Concept of Goal Congruency 2. Transfer Pricing Policies a. Market Price Are products exactly alike?
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Unformatted text preview: b. Cost-Based • Variable Cost • Full Cost – What does it mean? • Full Cost + markup c. Negotiated • Minimum for Selling Division – variable cost (what if operating at capacity?) • Maximum for Buying Division – market price...
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