Some of the methods used for determining transfer prices are ___________?
Correct answer: D. all of above
- A. market-based transfer prices
- B. cost-based transfer prices
- C. negotiated transfer prices
- D. all of above
Explanation
Transfer prices may be based on external market prices, cost information, or negotiations between subunits. Therefore, all three listed methods are recognized approaches.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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