When using a market-based transfer price, a decision must be made which market price to use

Related Questions

• Q24:

  When using a negotiated transfer price,a determination must be made if comparable substitutes are available externally.

• Q25:

  In computing a transfer price,the maximum price should be no higher than the highest market price at which the buying segment can obtain the good or service externally.

• Q26:

  In computing a transfer price,the minimum price should be no lower than the incremental costs associated with the goods plus the opportunity cost of the facilities used.

• Q27:

  Transfer prices can be used to promote goal congruence among operating segments of an organization.

• Q28:

  Market based transfer prices are most effective for common high-cost and high-volume standardized services.

• Q30:

  When using a market-based transfer price,a decision must be made which market price to use.

• Q31:

  One of the main factors to consider when using a cost-based transfer price is whether to use actual or standard costs.

• Q32:

  A service department provides services that benefit other internal units of an organization.

• Q33:

  The most theoretically correct method of allocating service department costs is the algebraic method.

• Q34:

  Negotiated transfer prices are most appropriate for low cost and low volume services.