The price charged by one subunit to supply products or services to another unit is called _____________?
Correct answer: D. transfer price
- A. subunit autonomy cost
- B. effort cost
- C. performance prices
- D. transfer price
Explanation
A transfer price is the amount charged when one subunit supplies goods or services to another subunit of the same company. It is used to measure the performance of the buying and selling subunits.
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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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