Question 1

An intermediate market is perfect when:

Accepted Answer

A)  there is no quality differences between inside and outside suppliers.
B)  there is no quality differences between inside and outside customers.
C)  buyers and sellers can sell any quantity without affecting the market price.
D)  buyers and sellers are motivated to make decisions that are consistent with those of the organization.E) A) and B)
F) C) and D)

Question 2

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: (CIA adapted)

Accepted Answer

A)  market-based transfer pricing.
B)  cost-based transfer pricing.
C)  negotiated transfer pricing.
D)  cost plus 20% transfer pricing.E) All of the above
F) A) and D)

Exam 15: Transfer Pricing

Correct Answer
verified

An intermediate market is perfect when:

Correct Answer
verified

Exam 15: Transfer Pricing

Correct AnswerverifiedShow Answer

An intermediate market is perfect when:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified