DescriptionYou have two atempts. This test is not timed and please save your wor
ID: 2409494 • Letter: D
Question
DescriptionYou have two atempts. This test is not timed and please save your work at all time. Solution will be displayed after due date. Instructions Mutple Amempts This test allows 2 altempts. This is attempt number 1 Fonce Completion This test can be saved and resumed later w Question Completion Status ? ?Mong to anoter question wil save this response 28 Which of the tollowing is true about transfer pricing? A) The maximum price that the buying division is wiling to pay is the higher of the eventual contribution generated from an internal transaction and the price of purchasing from an external party B) The seling division must always set a transfer price above the market price of the product to make the transacion economically feasible for the buying division C) There is generally a minimum transfer price the selling division will not go below based on its own cost structure D) The transter-price range les between the its fixed cost per unit and the higher of its contribution or price at which the product is avalable from external suppliers > Moving to another queston wil save this response to searchExplanation / Answer
Transfer price is a price at which one division or branch of one company transfer the material produced to any other unit of same company. So Transfer pricing is decission of selling goods ti its own company by one division to other division. Transfer pricing decission will be taken by considering the many factors of internal and external. So the best price which is give more contribution to overall company will be taken for the transfer pricing. As per the above correct anwer is as below, Answer = Option A = The maximum price that the buying devission is willing to pay is the higher of the eventual contribution generated from an internal transaction and the price of purchasing from an external party.