Transfer pricing" refers to: a. the price charged when a company sells to its employees. b....

Transfer pricing" refers to:

the price charged when a company sells to its employees.

the price charged when a company sells to its customers.

the price charged when one division sells to another division.

the price charged when a company sells to a stockholder.

34. The most important goal of transfer pricing should be to:

a.	maximize the goals of the buying division.
b.	maximize the goals of the selling division.
c.	maximize the goals of the employees working in those divisions.
d.	maximize the goals of the company as a whole.

Solutions

Expert Solution

Transfer pricing refers to value attached to transfer of goods or services between related parties.Transfer price is the price at which related parties transact with each other, such as during the trade of supplies or labor between departments. Transfer prices are used when individual entities of a larger multi-entity firm are treated and measured as separately run entities. It is common for multi-entity corporations to be consolidated on a financial reporting basis; however, they may report each entity separately for tax purposes.

ekkarill92 answered 2 years ago

Next > < Previous

Related Solutions

33. "Transfer pricing" refers to: a. the price charged when a company sells to its employees....

33. "Transfer pricing" refers to: a. the price charged when a company sells to its employees. b. the price charged when a company sells to its customers. c. the price charged when one division sells to another division. d. the price charged when a company sells to a stockholder. 34. The most important goal of transfer pricing should be to: a. maximize the goals of the buying division. b. maximize the goals of the selling division. c. maximize the goals...

Define Define (a)Negotiated transfer pricing method (b)Marketing based transfer pricing method Effect of each method on...

Define Define (a)Negotiated transfer pricing method (b)Marketing based transfer pricing method Effect of each method on the divisional performance

The B Company provides an onsite cafeteria for employees. The company charges employees a flat price...

The B Company provides an onsite cafeteria for employees. The company charges employees a flat price of $5.75 per meal and serves 20,000 meals a year. The latest financial report indicates that the cost per meal includes variable costs (food and labor) of $4.00 per meal and fixed costs of $1.10 per meal. An outside catering firm has offered to take over the cafeteria function and charge B Company $3.75 per meal. If the cafeteria is outsourced 10% of the...

Discuss the use of transfer pricing and its application to decision making

Financial Controllership Assignment Case Analysis Transfer Pricing BIRCH PAPER COMPANY “If I were to price these...

Financial Controllership Assignment Case Analysis Transfer Pricing BIRCH PAPER COMPANY “If I were to price these boxes any lower than $480 a thousand,” said James Brunner, manager of Birch Paper Company’s Thompson Division, “I’d be countermanding my order of last month for our salesmen to stop shaving their bids and to bid full-cost quotations. I’ve been trying for weeks to improve the quality of our business, and if I turn around now and accept this job at $430 or $450...

Direct price discrimination is a pricing strategy where different price is charged for different customers over...

Direct price discrimination is a pricing strategy where different price is charged for different customers over the same goods and or service. This can be done for example when a Barber charges higher to higher income people and lower to lower-income people. Indirect price discrimination is when consumers are given price options allowing them to choose what suits them the best. A perfect example is when customers but different types of burgers at McDonald’s depending on their income. Direct price...

Which of the following is not a method commonly used for establishing transfer prices? a. Cost-based transfer price. b. Negotiated price. c. Market-based transfer price. d. Industrywide transfer price.

Which of the following is not a method commonly used for establishing transfer prices?a. Cost-based transfer price.b. Negotiated price.c. Market-based transfer price.d. Industrywide transfer price.

The Sunrise Mattress Company uses transfer pricing for all work in process transfers between its divisions....

The Sunrise Mattress Company uses transfer pricing for all work in process transfers between its divisions. Senior management believes that the transfer price is an important tool to motivate appropriate behaviour and believes that each division should negotiate its prices when a transfer takes place. To make the mattresses that the company sells, the Spring Division buys processed cloth padding from an outside supplier. Cost information on the foam produced in the Foam Division is as follows: Raw material...

When a rubber rod is rubbed with fur, the rod becomes negatively charged because of the transfer of:

When a rubber rod is rubbed with fur, the rod becomes negatively charged because of the transfer of: a) electrons to the fur b) protons to the fur c) electrons to the rod d) protons to the rod

Price discrimination is a pricing strategy where different groups of consumers are charged different amounts for...

Price discrimination is a pricing strategy where different groups of consumers are charged different amounts for the same good. This is further divided into direct and indirect categories with direct price discrimination charging different prices to different groups of consumers such as adults vs children or students vs non students and indirect discrimination charging different prices based on features that consumers are willing to pay for such as a cruise ship ticket that offers interior, exterior or balcony cabins. Direct...

Subjects