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The Eastern Division sells goods internally to the...




The Eastern Division sells goods internally to the western division of the same company. The quoted external price in industry publications from a supplier near Eastern is $200 per ton plus transportation. It costs $20 per ton to transport the goods to Western. Eastern's actual market cost per ton to buy the direct materials to make the transferred product is $100. Actual per-ton direct labor is $50. Other actual costs of storage and handling are $40. The company president selects a $220 transfer price. This is an example of: A. market-based pricing B. cost-based transfer pricing C. negotiated transfer pricing D. Cost plus 20% transfer pricing


Paper#6442 | Written in 18-Jul-2015

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